NEW DELHI: In what could be a pathbreaking disinvestment move, a panel of secretaries has proposed that the government exit four public sector undertakings (PSUs) — fuel retailer Bharat Petroleum, Shipping Corporation of India, and power companies THDC and NEEPCO — while paring its holding in Concor from around 55% to 25%.
The plan will have to be cleared by the Union cabinet before the sale process can commence, officials familiar with the development told TOI. A source said following the recommendations of the committee, the proposal will be moved for cabinet approval in the next two weeks.
Based on the current market value of the three listed PSUs, the government can hope to raise around Rs 65,000 crore through stake sale in BPCL, Concor and Shipping Corporation.
“Whatever is the government holding in four PSUs will be put up for sale, while only 30% stake will be sold in container company Concor,” a source said. This is in line with NITI Aayog’s recommendations to raise much-needed cash at a time when the government is stepping up public spending and is expected to take a Rs 1.45 lakh crore hit due to its decision to lower corporation tax rates. This year, the government is hoping to raise Rs 1.05 lakh crore through disinvestment, including strategic sale, which will result in the Centre selling a block of shares to a corporate entity, and handing over management control.
During its first term, the Narendra Modi government had moved slowly on strategic sale, having had to abort its plan to sell loss-making Air India only to restart it after assuming office three months ago. With the government having resorted to selling its stake in PSUs such as HPCL to ONGC and REC to Power Finance Corporation, experts are wary of the Centre’s intent to actually “privatise” companies.
Officials, however, said that the idea is privatise the companies, including a sale to foreign players.
The latest plan to sell stake in five companies will, however, require legislative changes, at least in the case of BPCL, which was formed through nationalisation. The Atal Bihari Vajpayee government, which had initiated the sale process over 15 years ago, had to drop it after a Supreme Court ruling, which cited the need for Parliamentary approval.
While ministries such as railways are open to the sale plan, there are concerns over the government’s decision to exit entities such as Shipping Corporation, where the holding is seen to be strategic as the PSU is tapped for oil and other shipments in times of need.