In a bid to boost disinvestment receipts, the Cabinet on Thursday gave its approval to sell Enemy Property worth Rs 3,000 crore. We take a closer look.
Modi government’s unique disinvestment: In a bid to boost disinvestment receipts, the Cabinet on Thursday gave its approval to sell Enemy Property worth Rs 3,000 crore. The ‘in principle’ approval is according to the Enemy Property Act, 1968. The proceeds from the sale of these shares will be deposited as disinvestment proceeds in the Government Account maintained by Ministry of Finance.
What is enemy property?
According to the Enemy Property Bill of 1968, ‘Enemy property’ refers to any property belonging to, held or managed on behalf of an enemy, an enemy subject or an enemy firm. A recent amendment to the 49-year-old Enemy Property (Amendment and Validation) Act ensures the heirs of those who migrated to Pakistan and China during Partition and afterwards will have no claim over the properties left behind in India.
How sale will be carried out
A total of 6,50,75,877 shares of 996 companies belonging to 20,232 shareholders have been identified. Of the total of 996 companies, 588 are still active and 139 are listed firms. Notably, these stocks have been lying unused since the Enemy Property Act was passed way back in 1968. The shares are currently in the custody of Ministry of Home Affairs and Custodian of Enemy Property of India (CEPI). The Department of Investment and Public Asset Management (DIPAM) has been authorised to sell them. In order to execute the sale, an inter ministerial group will be incharge of guiding the sale.
Where proceeds will be used
After Thursday’s Cabinet approval, an Alternative Mechanism headed by the Finance Minister will promulgate the process of selling the shares. According to a government release, the development will lead to monetisation of movable enemy property lying dormant for decades and “sale proceeds from this may be used for development and social welfare programmes”. Some properties, including companies’ shares belonging to nationals of Pakistan, were tagged by the Indian government as enemy properties during the wars in 1962, 1965 and 1971 and vested with CEPI.