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  India   All India  23 Oct 2019  Government decides to sell 11 PSUs

Government decides to sell 11 PSUs

Published : Oct 23, 2019, 2:12 am IST
Updated : Oct 23, 2019, 2:12 am IST

MTNL, Bhel, ITDC’s Ashok Hotel in Delhi up for disinvestment.

Nirmala Sitharaman (Photo: Asian Age)
 Nirmala Sitharaman (Photo: Asian Age)

New Delhi: In a first, the Modi government at the Centre has finalised 11 “ailing” Public Sector Units (PSUs) for strategic sale as part of its disinvestment plan. The government move, however, aims at meeting the fiscal deficit target and bring the country’s economy back on track. In its recent meeting with top officials of the Prime Minister’s Office (PMO), the finance ministry is learnt to have set an ambitious target to offload government’s holdings.

These 11 PSUs include Bharat Heavy Electricals, Andrew Yule & Co, ITDC’s Ashok Hotel, Balmer Lawrie Investments and Balmer Lawrie & Co, Mahanagar telephone Nigam (MTNL), Telecommunications Consultant India, National Textile Corporation, FCI Aravalli Gypsum and Minerals India, Hindustan Copper, MECON and Braithwaite & Co.

“The government is all set for a series of blockbuster divestments, lining up strategic sales of as many as 11 PSUs. Once the Cabinet gives its nod to the list, jointly prepared by Niti Ayog and department of investment and public asset management (DIPAM), the government will move ahead with the strategic sale of these PSUs whenever it finds the market condition suitable for the same,” a top source in the finance ministry told Financial Chronicle on Tuesday.

Besides, the government has also lined up a host of other PSUs for strategic sales in tranches, which includes refiner and fuel retailer Bharat Petroleum Corporation Ltd (BPCL) to foreign and private firms. “Though it is a fact that BPCL’s name does not find mention in the list as of now, the government will first have to take it to Cabinet for its approval,” the source said, adding that the privatisation plan requires the nod of Parliament and as per plan, it may sell most of its 53.3 per cent stake to a strategic partner.

The source added that the other PSUs, which have been approved by the government for disinvestment, include Bharat Immunologicals & Biologicals Corporation Ltd, Bharat Earth Movers, National Aluminium Company, Natinal Mineral Development Corporation, Scooters India, Certification Engineers International Ltd, Projects & Development India, Bridge & Roof Co (India), Engineering Projects (India), Hindustan Newsprint Ltd, Cement Corporation of India, Hospital Services Consultancy Corporation (India), Pawan Hans, National Projects Construction Corporation, ITDC Hotels (for long-term lease of 50 years).

With such a move, it is well understood that the government will become a minority shareholder through these strategic sales which is happening in the country for the first time. The list also indicates the names of the companies which will participate in the sale.

The idea is to meet the budgetary shortage arising out of the recent tax exemption announcement. This revenue generation will be apart from the off-budget dividend of around Rs 58,000 crore from the Reserve Bank of India (RBI), which has already come to the government’s kitty.

The Centre also plans to give some of the hotels, which are currently being managed by ITDC Hotels, on joint venture basis to its strategic partner. “These hotels include Dony Polo Ashok (Itanagar), Punjab Ashok, Ashok Hotel (New Delhi), Hotel Janpath (New Delhi), Hotel Samrat (New Delhi), Lalitha Mahal Palace Hotel (Mysore), Hotel Jaipur Ashok (Jaipur), Hotel Jammu Ashok (Jammu) and Hotel Patliputra Ashok (Patna),” the source added.

Earlier this month, a group of secretaries cleared strategic sales in Bharat Petroleum Corp Ltd (BPCL), BEML, Container Corporation of India (Concor) and Shipping Corporation of India (SCI). Stake sales in THDC India and Neepco, both power companies, have also been approved. These could be taken over by the state-run NTPC.

The other eight PSUs, which have been lined up by the government for disinvestment in the second tranche, include Bharat Pumps & Compressors, Central Electronics, Ferro Scrap Nigam, Hindustan Fluorocarbons, Container Corporation of India, Hindustan Prefabs, MMTC/STC, three units of SAIL (Bhadrawati, Salem and Durgapur).

In the third phase of tranche, the PSUs which are likely to go for disinvestment include Dredging Corporation of India, Hooghly Dock & Port Engineers, Kamrajhar Port, Shipping Corporation of India, HLL Lifecare, Indian Medicines & Pharmaceuticals, RITES, IRCON International, Karnataka Antibiotics & Pharmaceuticals, Hindustan Antibiotics and Bengal Chemicals & Pharmaceuticals.  

However, the source added that Air India and its subsidiaries would form part of the disinvestment programme in the fourth tranche. “Those subsidiaries of Air India include Air India, Air India Charters, Air India Air Transport Services, Allied Air Services, Air India Engineering Services and Hotel Corporation of India,” it said.

These strategic sale will help the government in its plan to raise Rs 1,57,000 crore from disinvestment of the PSUs, against the budgeted divestment of Rs 1 lakh crore in this financial year for partly bridging the fiscal gap arising out of the Rs 1.45 lakh crore tax stimulus offered to the corporates. It is, however, learnt that the Centre has taken the move to line up the CPSEs for strategic sale in five tranches over the next few years.

Tags: public sector units, finance ministry