In a bid to expedite the sale of loss-making public sector undertakings (PSUs), the Prime Minister’s Office seems to have decided to bypass the administrative ministries so that the latter do not obstruct disinvestment in sick state-run companies.
A meeting was held at Niti Aayog, New Delhi, on Tuesday in which was attended by Aayog Vice-Chairperson Arvind Panagariya, Chief Executive Officer Amitabh Kant, Additional Principal Secretary to Prime Minister P.K. Mishra, and an official from the Expenditure Department, Finance Ministry. According to official sources, a decision has been taken to keep the administrative ministries out of the loop as far as the privatization of sick PSUs is concerned. The decisions will be taken at the Aayog, sent to the PMO for final approval, and the respective ministries will be directed to implement the decision.
It may be mentioned that line ministries had strongly resisted privatization when Atal Bihari Vajpayee’s disinvestment minister Arun Shourie had tried to privatize PSUs. Shourie regularly locked horns with his ministerial colleagues over the issue.
In his Budget speech for 2016-17, Finance Minister Arun Jaitley had indicated that the Aayog would place a nodal role in the divestment process. The induction of Kant, a high-profile former bureaucrat, has set the ball rolling.
Sources said that the Aayog would categorize PSUs as profit making, loss-making, and potentially sick. At present, the emphasis is on the sale of sick and potentially sick PSUs. Decision would be made on a case-to-case basis, the modes varying from strategic sale to asset-stripping. “We will encourage CPSEs to divest individual assets like land, manufacturing units etc to release their asset value for making investment in new projects. The NITI Aayog will identify CPSEs for strategic sale,” the Finance Minister had said.
For the profit-making PSUs, the current policy of minority stake sale is likely to be continued. The Centre intends to raise Rs 56,500 crore through disinvestment in 2016-17. In the last fiscal, though, only Rs 25,300 crore could be fetched.