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Government to sell stake in five top PSUs

THE ASIAN AGE. | ANIMESH SINGH
Published : Nov 21, 2019, 1:32 am IST
Updated : Nov 21, 2019, 1:33 am IST

The decision taken on Wednesday could be seen as a precursor to more such moves in future.

Finance minister Nirmala Sitharaman (Photo: File)
 Finance minister Nirmala Sitharaman (Photo: File)

New Delhi: In a major decision aimed at boosting its depleting coffers in the face of gloomy economic growth and unemployment breaking decades-old records, the Centre on Wednesday approved strategic sale of its stake in five major public sector undertaking, mainly Bharat Petroleum Corporation Ltd (BPCL), Shipping Corporation of India (SCI) and Container Corporation of India (Concor).

The Union cabinet also decided to reduce its shareholding in select public sector firms below 51 per cent to boost reserves.

The Cabinet Committee on Economic Affairs (CCEA) approved sale of the Centre’s entire 53.29 per cent stake, along with the transfer of management control in the country’s second-biggest state-owned refiner BPCL.

Finance minister Nirmala Sitharaman told media persons after the Cabinet meeting that the strategic disinvestment of Centre’s entire shareholding of 53.29 per cent in BPCL along with transfer of management control to a strategic buyer has been cleared. However the government’s equity shareholding of 61.65 per
cent in Numaligarh Refinery Limited (NRL, which is part of BPCL) and its management control thereon have been kept out of the ambit of the Cabinet decision.

Ms Sitharaman said that NRL will be handed over to a public sector oil company to allay concerns of the Northeast over the decision of the Centre.

The Centre has also decided to divest its 63.75 per cent share in SCI along with transfer of management control to a strategic buyer.

Similarly, in Concor too, the government has decided to divest 30.8 per cent of its share out of the 54.8 per cent equity it holds in the company, along with transfer of management control to a strategic buyer.

Apart from this, the Cabinet also decided to divest its 74.23 per cent shareholding in Tehri Hydro Development Corporation India Limited THDCIL along with transfer of management control to an identified CPSE strategic buyer, namely, NTPC, the finance minister informed further.

In North Eastern Electric Power Corporation Limited (NEEPCO), the government will completely divest its 100 per cent stake along with transfer of management control to an identified CPSE strategic buyer, namely, NTPC.

Strategic disinvestment of CPSEs will be undertaken through already established procedure and mechanism, official sources said.

In a related decision, the Cabinet granted ‘in-principle’ approval for enabling reduction of Centre’s paid-up share capital below 51 per cent in select PSUs while retaining the management control on case to case basis, taking into account the Government shareholding, and the shareholding of Government-controlled institution.

Official sources said that this would widen the bandwidth of disinvestment window in select state-owned entities.

This newspaper had reported exclusively on September 30 that the Centre plans to sell its stake in some key profit-making blue-chip public sector entities like Bhel and Hindustan Copper Ltd, as well as others like the iconic ITDC Ashok Hotel, and even in the loss-making Mahanagar Telephone Nigam Ltd (MTNL), apart from National Textile Corporation Ltd, among others, in the next five years.

The decision taken on Wednesday could be seen as a precursor to more such moves in future.

Tags: economic growth, nirmala sitharaman