Disinvestment: Narendra Modi govt may sell stake in 3 PSUs

The government is quietly moving ahead with the plan for strategic disinvestment of select public sector undertakings (PSUs), and there could be at least two-three such stake sales in the current fiscal, officials said.
The idea is that a momentum is created before accelerating such sales in the remaining period and use the non-debt
revenue generated to fund development activities and infrastructure projects.

NITI Aayog, which has been tasked with identifying the PSUs for strategic sale, has already submitted two reports: the first report has identified 74 sick and loss-making companies for action while the second is understood to have recommended strategic disinvestment of about 30 other companies.

The Aayog is preparing a second list of companies for strategic disinvestment to include more companies in the pipeline to be disinvested.

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In the past, loss-making telecom companies — MTNL and BSNL — were often mentioned as candidates for strategic disinvestment. However, the government has not yet taken any concrete step in this direction.

In a strategic disinvestment, government stake can come down to below 49% in a PSU from up to 100% now.

However, strategic disinvestment could often take a long time to materialise depending on the complexity of the issues and the company involved. Even though Air India, long considered a burden on the exchequer, features in the list of 74 sick and loss-making units, the government wants the ongoing revival plan to run its full course.

On the initial two reports of the Aayog, the respective administrative ministries and the Department of Investment and Public Asset Management (Dipam) have been asked to work out the details on how to go about the strategic stake sales.

The Prime Minister’s Office is also understood to have asked the Aayog to start the process by identifying one company for strategic sale and executing it before taking up a new company.

As reported by FE, the government is considering privatisation of two perennially loss-making units of public-sector steel major SAIL — Salem Steel Plant (SSP) in Tamil Nadu and Visvesvaraya Iron and Steel Plant in Karnataka.

The government aims to raise Rs 36,000 crore revenue from minority stake sales in PSUs in 2016-17. Another R20,500 crore will be raised from strategic stake sales in PSUs.