Rediff.com« Back to articlePrint this article

Divestment of BPCL, Air India to be completed in FY22: FM

February 01, 2021 16:55 IST

The government on Monday budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one general insurance company, in the next fiscal year beginning April 1.

Divestment-fm-nirmala-sitharaman

Illustration: Dominic Xavier/Rediff.com

The amount is lower than the record Rs 2.10 lakh crore which was budgeted to be raised from CPSE disinvestment in the current fiscal year.

However, the COVID-19 pandemic impacted the government's CPSE stake sale programme, and the target has been lowered to Rs 32,000 crore in the Revised Estimates.

 

So far this fiscal year, the government has mopped up Rs 19,499 crore from CPSE stake sale and share buyback.

For fiscal year 2021-22, out of the total Rs 1.75 lakh crore, Rs 1 lakh crore is to come from selling government stake in public sector banks and financial institutions.

Rs 75,000 crore would come as CPSE divestment receipts.

Unveiling the Disinvestment/Strategic Disinvestment Policy, Finance Minister Nirmala Sitharaman said four sectors -- atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services -- would be strategic sectors.

In strategic sectors, there will be bare minimum presence of the public sector enterprises.

The remaining CPSEs in the strategic sectors will be privatised or merged or subsidised with other CPSEs or closed.

In non-strategic sectors, CPSEs will be privatised, otherwise shall be closed.

In her 2021-22 Budget speech, she said strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Ltd, among others would be completed in 2021-22.

"Other than IDBI Bank, we propose to take up the privatization of two public sector banks and one general insurance company in the year 2021-22.

“This would require legislative amendments and I propose to introduce the amendments in this session itself," she said.

Also the legislative amendments required for launching IPO of LIC would be brought in the ongoing session of Parliament.

To fast-track the disinvestment policy, NITI Aayog would work out on the next list of central public sector companies that would be taken up for strategic disinvestment.

Also to similarly incentivise states to start disinvestment of their public sector companies, the government will work out an incentive package of central funds for states.

Besides, to ensure timely completion of closure of sick or loss making CPSEs, a revised mechanism would be brought in, she said.

"Idle assets will not contribute to Aatmanirbhar Bharat. The non-core assets largely consist of surplus land with government ministries/departments and public sector enterprises.

"Monetizing of land can either be by way of direct sale or concession or by similar means.

“This requires special abilities and for this purpose, I propose to use a Special Purpose Vehicle in the form of a company that would carry out this activity," Sitharaman added.

Unveiling the disinvestment/strategic disinvestment policy, she said  the policy aims at minimising the presence of central public sector enterprises, including financial institutions and creating new investment space for private sector.

"Post disinvestment, economic growth of Central Public Sector Enterprises (CPSEs)/ financial institutions will be through infusion of private capital, technology and best management practices. Will contribute to economic growth and new jobs," the Budget said.

© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.