Govt clarifies on relevant criteria for privatisation/disinvestment of PSUs

New Delhi: Whether a PSU is a profit-making or loss-making is not among the relevant criteria for privatisation/disinvestment, govt clarified in the Lok Sabha on Monday while responding to a question on privatisation and disinvestment of the public sector enterprises. Minister of State (Finance) Dr Bhagwat Karad said "profit /loss is not among the relevant criteria for privatisation/disinvestment".

In response to a question of Andhra Pradesh MP N. Redeppa, Karad said that the policy on strategic disinvestment and privatisation is based on the economic principle that Government should discontinue in sectors, where competitive markets have come of age.

He further clarified that at the time of deciding for privatization or disinvestment, it is seen that economic potential of such entities may be better discovered in the hands of strategic investor due to various factors such as infusion of capital, technological upgradation and efficient management practices.

Karad informed the Lok Sabha that the Government, since 2016, has given ‘in-principle’ approval for strategic disinvestment of 36 cases of PSEs and/or Subsidiaries/ Units/ Joint Ventures of PSEs/Bank. Out of the 36 cases, 33 cases are being handled by DIPAM and 3 cases are being handled by the respective Administrative Ministry/Department.

Out of the 33 cases being handled by DIPAM, strategic disinvestment transactions have been completed in 10 cases ( 8 transactions are in CPSE to CPSE space while Air India and NINL have been privatized). Of the remaining 23 cases, 5 PSEs are under consideration for closure; 1 case held up due to litigation and 1 case is under Corporate Insolvency Resolution Process (CIRP) in NCLT and 2 transactions found not feasible.

"Remaining 14 transactions are at various stages", he added.

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