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Centre mulls closure of PSUs up for sale on case-to-case basis
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SME Times News Bureau | 19 Sep, 2020
The Union government may consider the closure of central public sector
units (PSUs) even if they have been approved for strategic disinvestment
on a case-to-case basis.
In a written reply to a question in the
Lok Sabha, Minister of State for Finance Anurag Thakur said that the
government follows a policy of closure of centre public sector
enterprises (CPSEs) in terms of the approved revised guidelines dated
June 14, 2018 issued by the Department of Public Enterprises (DPE).
"The
government may consider the closure of the CPSEs even in cases earlier
approved for strategic disinvestment on a case to case basis," Thakur
said, adding that the guidelines issued by the DPE on the closure of
CPSEs addresses the concerns regarding the employees and assets.
Thakur
noted that the government has given 'in-principle' approval for
strategic disinvestment of 34 CPSEs, including subsidiaries and units of
CPSEs.
Several of these CPSEs are loss making and sick entities
where the government in the past had also faced difficulties in
strategic disinvestment. Such companies which have lost value could be
the ones that may be recommended for closure.
In certain other
CPSEs, policy of minority stake sale without transfer of management
control through various SEBI approved methods is being followed in order
to unlock the value, promote public ownership and higher degree of
accountability, he said.
The various modes of disinvestment
commonly used for minority stake sale includes Initial Public Offer
(IPO), Follow on Public Offer (FPO), Offer for Sale (OFS), buyback of
shares and Exchange Traded Funds (ETF).
"Transaction receipts on
conclusion of disinvestment transactions depend on the prevailing market
conditions and investors' interest," the minister said.
The budget estimate (BE) of disinvestment receipts for 2020-21 from disinvestment of CPSEs was fixed at Rs 1.20 lakh crore.
The
already lagging disinvestment plans, have been severely impacted by the
ongoing pandemic and deadlines for submission of bids major PSUs on the
block, such as oil major BPCL and national carrier Air India have been
postponed.
The government is also coming up with a new strategic
disinvestment policy as announced by the Finance Minister in May.
According to sources, the Cabinet may soon take up and approve the new
strategic disinvestment policy, which would include the banking and
insurance sector.
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