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Fire sale in Budget for PSUs, land and assets

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New Delhi, Feb 1 (IANS) A fire sale has been pressed into play with the Central government showing its intent to divest companies, shares and idle assets including land through which it hopes to garner significant receipts of Rs 1.75 lakh crore.

However, the fact remains that the Modi government is yet to achieve strategic sale of a PSU company in its tenure.

Finance Minister Nirmala Sitharaman announced in the Budget speech that a number of transactions namely of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Ltd among others, would be completed in 2021-22.

The divestments of BPCL and Air India have been hanging for more than a year now.

So is the glass on strategic sale/divestment half full or half empty? More transactions have been added to the strategic sale to do list.

Other than IDBI Bank, Centre also proposes to take up the privatisation of two public sector banks and one general insurance company in 2021-22.

“This would require legislative amendments and I propose to introduce the amendments in this session itself. In 2021-22 we would also bring the IPO of LIC for which I am bringing the requisite amendments in this Session itself,” Sitharaman announced.

While the LIC IPO may be doable during the year with a smaller float, a pure play strategic disinvestment is yet to be completed in this government’s term.

Sitharaman also announced that under the Atmanirbhar Package, a policy of strategic disinvestment of public sector enterprises was announced which has now been approved.

The policy provides a clear roadmap for disinvestment in all non-strategic and strategic sectors. “We have kept four areas that are strategic, 18 where bare minimum CPSEs will be maintained and rest privatised. In the remaining sectors, all CPSEs will be privatised,” Sitharaman announced.

“To fast forward the disinvestment policy, I am asking NITI Aayog to work out on the next list of Central Public Sector companies that would be taken up for strategic disinvestment,” she said.

In addition, to similarly incentivise states to take to disinvestment of their Public Sector Companies, the Centre will work out an incentive package of Central Funds for states.

Sitharaman also announced the intent to sell idle assets as they will not contribute to Atmanirbhar Bharat.

The non-core assets largely consist of surplus land with government Ministries/ Departments and Public Sector Enterprises. Monetising of land can either be by way of direct sale or concession or by similar means. “This requires special abilities and for this purpose, I propose to use a Special Purpose Vehicle in the form of a company that would carry out this activity,” she announced.

In order to ensure timely completion of closure of sick or loss making CPSEs, Sitharaman said a revised mechanism will be introduced that will ensure timely closure of such units.

–IANS

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