Modi Govt. pushes for divestment, list on July 5

NEW DELHI,PUJA MEHRA: An inter-ministerial meeting of secretaries will on July 5 shortlist loss-making and sick government companies to be considered for closure and strategic disinvestment from a list the NITI Aayog submitted to Prime Minister Narendra Modi’s Office last month.

File photo shows the NITI Aayog building, formerly known as the Yojana Bhawan in New Delhi.

The meeting will recommend strategic disinvestment only in non-contentious government com panies; Air-India, which is now reporting operating profits, and BSNL, among the top three loss-making public sector units, will not be considered.

The plan is to start with the low-hanging fruit, where least resistance is expected from the Opposition and the employees, and gradually build momentum. “BSNL would have been a prime candidate but with 2.5 lakh employees it cannot be the test case,” a top official source told The Hindu.

Sources in at least two departments said candidates are likely to be picked from among the state-owned companies in the cement, salt, textiles, paper and antibiotics sectors, since there was no reason for government presence in these businesses. They said there was a case for selling the Centre’s stake in a number of companies including Hindustan Goa Antibiotics and Pharmaceuticals, Orrisa Drugs and Chemicals, Rajasthan Drugs and Pharmaceuticals, Sambhar Salts, Hindustan Salts Ltd, Hindustan Newsprint Ltd, Hindustan Paper Corporation, Cement Corporation of India and National Textile Mills.

Those that could be taken up for closure include ITI Ltd, IDPL and Hindustan Antibiotics Ltd, which incidentally has considerable land holdings.

Tuesday’s meeting follows deliberations in the Prime Minister’s Office (PMO) late last month, at which the Finance Ministry and NITI Aayog officials were directed to ensure that the Centre kicks off strategic disinvestment this year.

A highly placed Finance Ministry official said it was trying its best to make sure at least one public sector unit was sold off this year.

He explained that strategic disinvestment might not be very easy and the NITI Aayog’s recommendations for such cases would have to be evaluated by the government minutely.

Earlier, the NITI Aayog submitted two lists to the Prime Minister’s Office: One for PSUs that can be considered for strategic disinvestment and the other of recommendations on each of the sick and loss-making government companies.

There are about 74 such companies in all. Of these, for about 25 companies in which revival plans were attempted but failed, it has suggested closure, after which their assets, especially land holdings, could be disposed off and employees offered voluntary retirement. In the remaining cases, either mergers with other public sector units or strategic disinvestment is recommended. In some companies, the NITI Aayog preferred to let revival plans run their course, before taking a call on their future.

The list of 15 PSUs in which the NITI Aayog has recommended strategic disinvestment on priority is now being examined by the Department of Investment and Public Asset management in the Finance Ministry.

The Cabinet Committee on Economic Affairs in February directed the NITI Aayog to identify PSUs that the Department could take up for strategic disinvestment and also suggest norms for doing so. Any disinvestment of government shareholdings, closure or mergers of PSU will need the Union Cabinet’s approval.