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Ongoing strategic disinvestments of CPSEs to be outside PSE policy purview


Ongoing transactions for strategic disinvestment of central public sector enterprises (CPSEs) will not be affected by the new policy, department of investment and public asset management (DIPAM) said Friday.

“The ongoing transactions for strategic disinvestment of CPSEs will not be affected by this policy and shall continue to be undertaken as per the extant procedure,” it said in a memorandum giving broad contours of the policy approved by Cabinet.

Strategic disinvestments of Air India,

Corp Ltd, and BEML announced during FY21, are in various stages of advancement. The government is expecting to conclude these transactions in FY22.

The policy aims to keep public sector enterprise presence to bare minimum in strategic sectors and open the non-startegic sectors to privatisation or merger or subsidiarization with another PSE, or for closure.

“Strategic sectors have been delineated based on the criteria of national security, energy security, critical infrastructure, provision of financial services and availability of important minerals,” the department has said.

Strategic sectors include atomic energy, space and defence; transport and telecommunication; power, petroleum, coal and other minerals; banking, insurance and financial services.

The policy aims to have a bare minimum presence in the commercial enterprises at holding company level, which will be retained under government control.

“The scope of this policy is limited to the existing central public sector enterprises, public sector banks and public sector insurance companies,” the memorandum has specified.

NITI Aayog will make recommendations on which companies will fall under the bare minimum criteria, which will be considered by the Core Group of Secretaries on Disinvestment.

DIPAM will obtain ‘in-principle’ approval from the CCEA for strategic disinvestment of a specific PSE from time to time, on a case-to-case basis.

The policy, however, does not apply to certain classes of public sector entities such as not-for-profit companies, or CPSEs providing support to vulnerable groups, or having developmental or promotional roles.

The memorandum has specified that PSEs involved in development, regulatory authorities, autonomous organizations, trusts, development financing or refinancing institutions created through the Acts of Parliament are outside the scope of the policy.

Major Port Trusts, Airport Authority of India, and government departments such as railways and posts that undertake commercial operations with a development mandate are also out of the policy’s scope, the memorandum has specified.

CPSEs concerned with security printing and minting, maintaining critical data having bearing on the national security have also been kept out of the scope of the policy.

Also excluded are enterprises providing support to vulnerable groups through financing of SCs, STs, minorities, backward classes, safai karamcharis etc, manufacturing aids and appliances for divyang, and those assisting farmers in mainly getting access to seeds, promoting innovation in agriculture or procurement and distribution of food for Public Distribution System.

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