CPSEs to get powers to promote arms, exit JVs

The Union Cabinet Wednesday empowered the boards of the Central Public Sector Enterprises (CPSEs) to privatise, disinvest or shut their subsidiaries and stakes in joint ventures. The transfer will give a fillip to the federal government’s efforts to unlock capital, that are both caught or sub-optimally employed in state property, and put these into extra productive use.

Many massive profit-making CPSEs like Coal India, ONGC and NTPC have helpful subsidiaries or JV partnerships. The Cabinet resolution will allow them to monetise components of those property with out having to safe the approval of the Cabinet or undergo the method involving the executive ministries and/or the division of funding and public asset administration (Dipam).

The transfer can be anticipated to scale back the burden on Dipam, which can might now concentrate on privatisation of holding corporations or dad or mum CPSEs. Currently, there are about 380 PSEs (together with subsidiaries), 20-30 per cent of which can be closed for being sick or unviable. The authorities has made it clear that apart from the sake of getting its minimal presence within the 4 strategic sectors, different corporations within the strategic sectors and all in non-strategic sectors will probably be privatised or closed. Currently, CPSE Boards don’t have powers for disinvestment/closure of their subsidiaries or items or stake in JVs, besides some restricted powers given to Maharatna PSEs for minority stake disinvestment of shareholding of their subsidiaries. —FE