New Delhi: The government has given ‘in-principle’ approval for the strategic disinvestment of 23 public sector undertakings (PSUs), including subsidiaries, units and joint ventures, Minister of State for Finance Anurag Thakur said while responding to a question in the Lok Sabha. The list includes Project & Development India Ltd., Hindustan Prefab Limited (HPL), Engineering Project (India) Ltd., Bridge and Roof Co. India Ltd, Pawan Hans Ltd., Air India and its five subsidiaries and one JV, among others.
‘Profitability not a criteria for disinvestment’
“During the last two years, strategic disinvestment of 5 CPSEs (HPCL, REC, NPCC, HSCC and DCIL) has been successfully completed. Profitability is not a criterion for strategic disinvestment,” he said and added that the strategic disinvestment being pursued by the government has been guided by the basic economic principle that the government should not be in the business to engage itself in sectors where competitive markets have come of age.
Responding to a separate question on bad loans, the minister said that withdrawal of Development Financial Institutions (DFIs) from financing high-value core industry and infrastructure project finance is a key reason why higher bad loans have been reported in state-run banks in the past few years, said Thakur.
“Since such financing is based on future cash flows that are generated only after project commissioning and repayment is spread over a long period, higher risk is inherent,” said Thakur. He also said that higher level of NPAs and relative weakness in financial performance reflect a greater share of PSBs in such lending.