Department of Public Enterprises comes back FinMin after 36 years

Hours before the reshuffle in the council of ministers, the Narendra Modi government brought the Department of Public Enterprises (DPE) under the Finance Ministry. Till then, the DPE was under the Ministry of Heavy Industries & Public Enterprises. The move is expected to give a fillip to the disinvestment process.

The sale of public sector undertakings (PSUs), also called public enterprises (PEs) and public sector enterprises (PSEs), is a long process and tough process, because it creates ripples in political circles and public debate. Having the DPE under the Finance Ministry can help make the process smooth, especially in the post-privatization phase. For the DPE’s duties include: counseling, training, and rehabilitation of employees in PSEs under the voluntary retirement scheme; rendering advice relating to revival, restructuring, or closure of PSEs, including the mechanisms thereof.

The DPE can be of great assistance to the Department of Investment & Asset Management (Dipam), also under FinMin, in the sale of PSUs.

It needs to be mentioned here that privatization has never been easy in India. When Arun Shourie, as disinvestment minister in the Atal Bihari Vapayee government (199-2004), sold PSUs, he and his supporters in the government were accused of ‘selling family silver to pay the grocer’s bill.’

It was not just the Leftists and trade union leaders who vilified Shourie but also many within the ruling dispensation. Privatizers were maligned as the stooges of blood-sucking capitalists, anti-poor, etc. This is something Prime Minister Modi—who presents himself as a champion of the poor—cannot afford,

This is the reason that Dipam—which is actually the Department of Disinvestment—called so. Indeed it was earlier known as the Department of Disinvestment.

It may be recalled the DPE came into being in the early 1960s. The Estimates Committee of 3rd Lok Sabha (1962-67) had “stressed the need for setting up a centralized coordinating unit, which could also make continuous appraisal of the performance of public enterprises,” the DPE website says.

Thus, the Bureau of Public Enterprises (BPE) was constituted in 1965 in the Ministry of Finance. As a consequence of the reorganization of the ministries and departments of the Union government a couple of decades later, it moved to the Ministry of Industry. In May 1990, the BPE became the Department of Public Enterprises (DPE). And now the DPE is back where it was born—the Ministry of Finance.