Category: PSU reforms & dis-investment

The Government should also unshackle the process of strategic disinvestment from bureaucratic red-tape The ministry of finance has barred public sector undertakings from bidding for other Central Public Sector Undertakings which are on the block for privatisation. The Department of Investment and Public Asset Management has stated: “As a general policy, PSUs (Central/ State/ Joint)/State Governments and Cooperative Societies controlled by the Governments are not permitted to participate in the strategic disinvestment of other PSUs as bidders unless otherwise specifically approved by the Central Government in public interest”. PSUs are undertakings in which the Centre/State Governments or jointly with central and/or State Governments have majority ownership (with shareholding of 51 percent or more) and control. If, the Government decides to...

The lengthy and cumbersome process of approval and bureaucratic red tape undermines the disinvestment process With the financial year ending in two months, the Government is no close to meeting the target of Rs 175,000 crore from disinvestment of Central Public Sector Undertakings set in the Union Budget for 2011-2022. It has so far realized less than Rs 10,000 crore. Even after adding around Rs 100,000 crore, being the expected proceeds from sale of its 10 percent shares in Life Insurance Corporation of India, (on the premise that it goes through before the year-end), there will be a whopping shortfall of Rs 65,000 crore. This is not new. It is a continuation of a trend seen during the previous six...

Persistent neglect of Air India for over a decade and even during the period when its sale was under consideration has cost the exchequer dear On June 28, 2017, the then Finance Minister, the late Arun Jaitely, had announced the ‘in-principle’ decision of the Union Cabinet for strategic divestment of Air India (AI) and five of its subsidiaries. Over 50 months there after, on September 8, 2021, the Government has informed about its decision to privatise AI and its 100 percent subsidiary, Air India Express Limited (AIEL) and its 51 percent share in Air India Air Transport Services Limited (AIATSL). The iconic Maharajahas gone back to the hangar of the Tata Group almost 68 years after the company was nationalized...

A loan taken with the sole intention of siphoning off funds for personal gains is bound to irreversibly damage the bank’s image According to a statement by the Minister of State for Finance, Bhagwat K Karad, in Parliament, non-performing assets (NPAs) or bad loans of banks declined from a high of around Rs 1036,000 crore as on March 31, 2018, to Rs 896,000 crore on March 31, 2020, and further down to Rs 834,000 crore on March 31, 2021. The choice of March 31, 2018 has special significance. Under the UPA, particularly during its second tenure 2009-2014, banks recklessly gave loans to corporate houses and businesses without assessing the viability of the projects and conducting due diligence. The ability of...

The Centre should de-bureaucratise the process of running PSUs. This should be done even before privatisation is taken up Under a big bang approach to privatisation announced in the Union Budget, Finance Minister Nirmala Sitharaman has divided the Central Public Sector Undertakings (CPSUs) in two broad categories i.e. strategic and non-strategic. Whereas the former is broken up into four subgroups: Atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; banking, insurance and financial services, the latter includes all other sectors such as hotel and tourist services, industrial and consumer goods, trading, marketing and so on. As per the plan, all PSUs in non-strategic sectors will be privatised and all loss-making enterprises in this category will be closed....