Government is expected to go ahead with the strategic divestment in public sector units within the next six months besides closing down sick firms that are beyond revival, NITI Aayog Vice Chairman Arvind Panagariya said.
"On strategic divestment, you will see action in the next six months I would say, meaning that the process is on, but you will see some action happening in the next six months or less," Panagariya said.
NITI Aayog has been tasked by the government to identify central public sector enterprises for strategic disinvestment.
The task also involves advising on the mode of sale, percentage of shares to be sold of the CPSE and method for valuation of the unit.
Panagariya said NITI Aayog has also done a report on identifying the units that are sick and may need to be closed down.
"So of the two issues, one report that we did was of the closure of the sick firms, the firms that are not performing and have repeated failures of revival.
"I think they need to be closed down," he said in a television interview.
The strategic disinvestment in CPSEs has to be undertaken through a consultation process among different ministries, including the NITI Aayog.
As per the disinvestment process, the Core Group of Secretaries on Disinvestment are to consider recommendations of NITI Aayog to facilitate decision making by Cabinet Committee on Economic Affairs.
Government has targeted to garner about Rs 56,500 crore (Rs 565 billion) through selling its stake in PSUs in the current fiscal, in accordance with the Budget 2016-17 announcement.
Of the total budgeted proceeds, Rs 36,000 crore (Rs 360 billion) is estimated to come from minority stake sale in PSUs while the remaining Rs 20,500 crore (Rs 205 billion) is planned to be generated from strategic sale in both profit and loss-making companies.
In 2015-16, the government failed to meet its divestment target and could generate only Rs 25,312 crore (Rs 253.2 billion) as against its expected proceeds of Rs 69,500 crore (Rs 695 billion).
Illustration by Uttam Ghosh/Rediff.com
