Six MORE PSUS MAY get the GREEN Light FOR STAKE SALE
‘The process will continue as there are many more PSUS listed for disinvestment’.
As many as six more public sector units (PSUS) that are listed before the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, are likely to get the nod for disinvestment soon, highly placed sources said.
On Wednesday, Finance Minister Nirmala Sitharaman announced that the CCEA has approved the sale of a stake in five PSUS, including blue-chip oil firm Bharat Petroleum Corporation Limited (BPCL), and with her announcement, the biggest ever exercise of privatisation has been started as there are 11 more PSUS that are likely to follow suit.
Sources have confirmed that the Centre will move further on its disinvestment project that is needed for realignment of the Indian economy.
A source told The Sunday Guardian: “The disinvestment process will not stop here as there are six more PSUS that have been listed before the CCEA for their approval for strategic sale and, therefore, we should expect an early decision on all of them.”
The CCEA has already approved the sale of the government’s stake in five PSUS, including the blue-chip oil firm Bharat Petroleum Corporation Limited (BPCL), Shipping Corporation of India (SCI), inland cargo mover Container Corporation of India (CONCOR), THDC India and North Eastern Electric Power Corp Ltd (NEEPCO).
The CCEA gave its nod for the sale of the government’s entire 53.29% stake in BPCL and the government will also transfer management control in BPCL. The government is divesting 53.75% of its 63.75% stake in SCI and a 30.9% stake in CONCOR.
The government currently holds a 54.80% stake in CONCOR, an inland logistic handling organisation.
“After the decision of disinvestment of five PSUS, now there are 46 PSUS left and the government is mulling to privatise them on a priority basis. Out of these 46 PSUS, the Centre has already given ‘in-principle’ approval for the strategic sale of 28 Central Public Sector Enterprises (CPSES), including subsidiaries, units and joint ventures, with the sale of a majority stake of Government of India and transfer of management control,” the same source cited above said.
Gopal Krishna Agarwal, BJP’S national spokesperson and an economic expert, said: “The much-awaited privatisation move of the CCEA is really a welcome step and the decision will give the required thrust to the Indian economy. In one go, the CCEA has kicked off many reforms, including labour reforms, and extended a helping hand to the telecom sector, initiated disinvestment of PSUS, securitisation and monetisation of NHAI.”
“There are certain issues and challenges in the economy that have been very well met in this recent reform move. Disinvestment is the need of the hour to augment government resources and also help in strategic alignment and mergers. Secondly, the telecom sector needs a helping hand for its r survival and the government in its recent move has done that,” Agarwal told The Sunday Guardian.
Asked about the continuity of the disinvestment process, Agarwal said: “Yes, the disinvestment process will continue as there are many more PSUS that have already been listed for disinvestment; however, the flow of this move will depend on the market’s demand. The disinvestment process is not an easy task and much of the decision in this regard is based on the demand side and the capacity of the market to absorb,” Agarwal added.
According to a government report, the PSUS listed awaiting CCEA nod include Project and Development India Ltd, Hindustan Prefab Limited (HPL), Hospital Services Consultancy Ltd (HSCCL), National Project Construction Corporation (NPCC), Engineering Project (India) Ltd, Bridge and Roof Co. India Ltd, Pawan Hans Ltd, Hindustan Newsprint Ltd (subsidiary), Scooters India Limited, Hindustan Fluorocarbon Ltd. (HFL) (subsidiary) and Air India and its five subsidiaries and one Joint Venture (JV), besides other stateowned companies.
All of these PSUS have already got the government’s “in principal” nod for stake sale.
Except for the BPCL, most of the public sector units up for sale are facing technology and capital crisis and are witnessing huge losses and the privatization move will ensure growth of these companies.
Based on current market prices, the sale of stake in these firms will generate about Rs 1 lakh crore for the Modi government.