Friday, June 24, 2022

Privatisation: Govt identifies 60 PSUs in non-strategic sectors

The government has identified around 60 PSUs in non-strategic sectors for privatisation or closure in line with its new public sector enterprises (PSE) policy

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  • There are around 175 PSUs in the non-strategic sectors, and one-third of these PSUs will be closed, said sources
  • The government will only retain a handful of non-for-profit PSUs under its control in these sectors

New Delhi: The government has identified around 60 PSUs under the Ministries of Fertilizer, Textiles, Chemicals and Petrochemicals, Pharmaceuticals and Commerce for privatisation or closure in line with its new public sector enterprises (PSE) policy, said two sources aware of the matter. According to the new PSE policy, the government has plans to either privatise or close PSUs in non-strategic sectors. There are around 175 PSUs in the non-strategic sectors, and one-third of these PSUs will be closed, and those that are viable units will be privatised, said sources. The decision was taken at a recent meeting of a group of officers from Niti Aayog, Department of Public Enterprises (DPE) and administrative ministries.

The government will only retain a handful of non-for-profit PSUs under its control.

Privatisation: PSUs under Fertilizer Ministry

According to the sources, all the nine PSUs under the Fertilizer Ministry are likely to be privatised over the years. To bring down India’s massive fertilizer import, the government is trying to increase domestic production. Since there’s no dearth of demand that should ideally be met through domestic production, these PSUs could be lucrative for the private sector.

In addition, the government could wind down two PSUs under the Commerce Ministry as their businesses have become unviable over the years.

Textiles Ministry PSUs could shut down

The sources said that among the PSUs under the Textiles Ministry, the government could go for the closure of National Textile Corporation (NTC), which has 23 mills with obsolete technology. However, the government is likely to retain Cotton Corporation of India (CCI) and Jute Corporation of India (JCI) as these are PSUs set up with the intent of ensuring the welfare of farmers. While CCI procures cotton from farmers, JCI procures jute through price support operations under the Minimum Support Price (MSP) mechanism.

New PSE policy

The new PSE policy unveiled in the Budget for 2021-22 is aimed at ensuring that the government has a bare minimum presence across four strategic sectors and no presence in non-strategic sectors. The list of strategic sectors includes atomic energy, space and defence, transport and telecommunications, power, petroleum, coal and other minerals, banking, insurance and financial services.

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