FinMin mulls bringing DPE under itself ahead of privatisation drive

Move aimed at better control over PSUs ahead of govt's ambitious privatisation drive

In order to better control public sector undertakings (PSUs), the finance ministry is considering bringing the Department of Public Enterprises (DPE) under itself as it ge­ars up for the ambitious privatisation exercise.

The Department of Economic Affairs has written to the Department of Investment and Public Asset Management (DIPAM) to explore the option, pointing to overlapping of some functions between the two bodies, according to a senior government official.

DPE currently comes under the Ministry of Heavy Industries and Public Enterprises. The department monitors performance of PSUs, dividend, capex performance, possibility of buyback of shares, and pay packages of the staff, among others. All these issues are related and overlap with some of the work allocation of DIPAM, the official said.

The move is also aimed at bringing more administrative efficiency between departments. Any such proposal will need approval from the Cabinet Secretariat and the Prime Minister’s Office.

This is not the first time this discussion has taken place. In 2017, the government was exploring merging DIPAM and DPE, but the proposal did not see the light of day.

The fresh proposal gains significance ahead of the government’s ambitious privatisation drive that seeks to maintain a “bare minimum” presence of PSUs in strategic sectors and privatise, merge, subsidiarise or close the rema­ining state-owned entities.

Last year, to make PSUs more accountable, DIPAM and DPE, collectively, had mandated PSUs to outline a plan for non-core asset monetisation, payment of assured sum as dividend to the government and steps taken to increase market capitalisation of listed PSUs.

Every year, targets for PSUs are a part of a memorandum of undertaking that they sign with the DPE. These targets are set in consultation with DIPAM.

More manpower for DIPAM

DIPAM is also in the process of increasing the strength of officers in the department after receiving a nod from Cabinet Secretariat. It will need a reva­mp and additional manpower as the government is preparing to implement the Public Sector Enterprises Policy for Atmanirbhar Bharat, which is expected to see a large number of PSUs being privatised.

According to the policy, PSUs in non-strategic sectors such as tourism, steel, among others, will be privatised or closed.

The department currently has one additional secretary, besides a secretary, and five joint secretary-level posts, of which one post of JS is vacant. It has 10 directors and deputy secretaries, nine under-secretaries and two deputy directors.

The process to increase the sanctioned strength of officials is being deliberated, the official said, adding that the process will take some time.