Panel: Revive PSUs without sale of capital assets

Any plan to revive distressed state-owned companies should not include selling of land and other capital assets of those companies, a high-powered panel under NITI Aayog on revival of sick public sector units (PSUs) is believed to have suggested. According to sources, it has also suggested that financial restructuring should always be the preferred option in any such plan.

The Aayog has been tasked by the government to identify those PSUs in which the Centre can lower its stake and also those where no stake sale can happen as they have become sick. It is also framing a policy for disinvestment and revival of sick state-owned units. The recommendation on no sale of land and capital assets is part of those recommendations.

Officials said the Aayog tentatively identified 26 PSUs that can be revived without the need to sell any asset, out of a list of 65 floundering PSUs as identified by the department of public enterprises. The sick PSU list, made public last year, includes Air India, Fertilizer Corporation of India, Hindustan Shipyard, HMT, Mahanagar Telephone Nigam, Bharat Coking Coal and ITI. Sources, however, did not divulge which of these sick PSUs have been recommended for revival.

REVIVAL BLUEPRINT

• NITI Aayog panel on revival of PSUs wants land sales out of revival plans
   
• Financial restructuring to be primary option of revival, says panel
  

 

NITI Aayog identifies 26 PSUs to revive
 

The Aayog also identifying candidates for strategic sale

On the matter of strategic sales, senior government sources have said that although no decision had been finalised yet, an emerging common view from discussions so far was that unlisted PSUs should be immediately made eligible for disinvestment without waiting for them to get listed. Setting the ball rolling on strategic sale of PSUs, the department of investment and public asset management and the NITI Aayog started discussions in March to identify state-run firms where the Centre can divest its stake.

Finance Minister Arun Jaitley has budgeted a rather ambitious disinvestment target of Rs 56,500 crore for FY17. Out of which, Rs 36,000 crore is expected to come from the reduction in the Centre's stake in listed PSUs through stake sales and buybacks. As much as Rs 20,500 crore is expected to come from strategic sales. The process involves the Aayog identifying the PSUs for strategic sale, advising the government on mode of sale, and suggesting methods on valuation of the company.

The Aayog and the Centre's two-pronged approach towards revising or selling stake in PSUs comes right from the top. While the Centre maintains it will exit from sectors where the government 'has no business being in business', Prime Minister Narendra Modi is someone who prides himself for having revived sick PSUs when he was Gujarat chief minister.