What is the news?
The Government of India has released a new ‘Public Sector Enterprise Policy’.
About ‘Public Sector Enterprise Policy’:
The policy classifies public sector commercial enterprises into the strategic and non-strategic sector:
Strategic Sector: There would be a maximum of four public sector companies in strategic sectors. State-owned firms in other segments would be privatized eventually.
The following 4 sectors are covered under strategic sectors:
- Atomic energy, Space and Defence
- Transport and Telecommunications
- Power, Petroleum, Coal, and other minerals
- Banking, Insurance, and financial services
Non- Strategic Sector: CPSEs of this sector shall be privatized or closed, if privatization is not possible.
Exceptions: The policy would not be applied on:
- Public sector classes like major port trusts, the Airport Authority of India, and undertakings in security printing and minting.
- Public sector entities such as not-for-profit companies or CPSEs providing support to vulnerable groups.
Process of Privatisation:
- NITI Aayog will recommend PSUs for retention in strategic sectors and that should be considered for privatization, merger, or closure.
- The Core Group of Secretaries on Divestment(CGD) headed by the cabinet secretary will consider these recommendations.
- Final approval will be provided by the Alternative Mechanism. This mechanism consists of the Finance minister, Ministers for Administrative reforms, and the Minister for roads, transport, and highways.
- Further, the Department of Investment and Public Asset Management (DIPAM), can also approach the Cabinet for strategic disinvestment of a specific PSE from time-to-time. DIPAM manages government equity in public sector companies.
Source: The Hindu