Kicking off the privatisation drive, NITI Aayog has submitted its first list of around 12 PSUs (Public Sector Undertakings) to be privatised.
The list submitted by the government's policy think tank includes PSUs in strategic sectors and will be reviewed by the Department of Investment and Public Asset Management (DIPAM), and the Core Group of Secretaries on Divestment (CGD), headed by the cabinet secretary, Business Standard reported citing sources.
The list comprises public sector banks (PSBs) and insurance companies and will be its first following the government's ambitious drive to privatise PSUs, as announced by Finance Minister Nirmala Sitharaman in Budget 2021. This would clear the way for the Centre to go ahead with its Rs 1.75 lakh crore disinvestment target for the next financial year.
FM Sitharaman, in her Budget speech, had announced privatising two PSBs and one general insurance company in 2021-22. As per the new PSE (Public Sector Enterprise) policy for Aatmanirbhar Bharat, NITI Aayog is entrusted with the task to suggest the names of PSUs in strategic sectors to be merged, privatised, or made subsidiaries of other PSUs.
The said strategic sectors, in which the Centre wants to keep a "bare minimum" presence, comprise power, petroleum, coal, and other minerals, atomic energy, space, defence, banking, insurance, and financial services, transport and telecommunications.
Meanwhile, PSEs functioning as autonomous organisations, regulatory authorities, trusts, and development financing institutions such as FCI (Food Corporation of India) and the AAI (Airports Authority of India) have been kept out of the policy. PSUs in non-strategic sectors such as steel and hospitality would be either privatised or closed.
Once the CGD considers NITI Aayog's recommendations, it will give its suggestions to the Alternative Mechanism (AM), which includes the finance minister, the minister for roads, transport and highways, and the minister for administrative reforms.
Once endorsed by the AM, DIPAM will then move a proposal to get in-principal approval from the CCEA (Cabinet Committee on Economic Affairs) for strategic disinvestment in a PSU case by case, basis administrative feasibility, sectoral trends, and investors' interest.