The Department of Investment and Public Asset Management under the finance ministry has proposed a framework to categorise Public Sector Undertakings (PSUs) for strategic and non-strategic sales.

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CNBC-TV18 has learnt, that the proposed framework will divide the PSUs into two broad baskets. In the first category, specific PSUs will be identified where the government will retain control while the Finance Ministry will carry out the strategic sale of the remaining public sector companies.

As per this proposed strategy government will continue to own a majority stake in PSUs engaged in sectors related to security and defence, natural resources, minimum price while the rest of the public sector companies will be sold off.

DIPAM has floated a proposed framework for the sale of PSUs that are now being taken up for inter-ministerial consultations.

As per the framework, the government will continue to have direct ownership and control of PSUs that are engaged in national security-related businesses, like defense equipment and nuclear power as these sectors are strategically important. Companies in this category include PSUs like Hindustan Aeronautics and Cochin Shipyard.

Similarly, PSUs that control natural resources, energy security, minimum price support will be part of the category where the government will continue to be the majority owner. The companies part of this list will include the likes of Coal India, ONGC, Food Corporation of India, Cement Corporation of India, and others.

Moreover, PSUs engaged in the management of core infrastructures like Airports Authority Of India and Rail Vikas Nigam Ltd are proposed to be under government control. The private sector will be allowed to bid for projects managed by PSUs in this category.

PSUs that have the mandate to carry out developmental and public purposes related to an activity like National Handloom Development Corporation will continue to be under government control for now but may see full divestment in the future.

The Government is open to exiting ownership in the rest of the PSUs. As per the proposed framework made by DIPAM, the remaining PSUs which are financially well placed and are also present in sectors where the competitive market has come of age are an ideal candidate for privatisation.

For example, in the fuel retail category, the government has relaxed norms for greater participation of private companies and hence strategic divestment of BPCL is part of the agenda. The proposal is also to hive off non-core subsidiaries or holding companies of PSUs as part of the strategic sale.

First Published:Jul 10, 2020 4:17 PM IST