Independent External Monitors to oversee PSU privatisation

Keen on clean and controversy-free privatisation of PSUs, the government today said it will appoint eminent persons as Independent External Monitors (IEM) to oversee the strategic disinvestment process likely to begin next fiscal.
Disinvestment Secretary Neeraj K Gupta said in an interview to PTI that the NITI Aayog has been entrusted with the responsibility of identification of CPSE, method of valuation, besides suggesting the mode and extent of disinvestment.
Outlining salient features of the strategic stake sale policy of the government, Gupta said NITI Aayog will consult with the Department of Public Enterprises, the administrative ministries as also the Department of Expenditure and finalise on the CPSE which is eligible for strategic sale.

"There will be an independent external monitor which will be one or multi-member body of eminent persons which will have oversight of the whole process and will also settle the grievances, if any, on the process. The committee will be put in place," Gupta said.
Asked if private sector or retired bureaucrats could be part of the IEM, he said: "Eminent persons will be those who have sufficient experience to give oversight."
The government yesterday came out with a policy for strategic sale of PSUs where in a Cabinet Secretary-headed inter-ministerial panel will look into the recommendation made by the NITI Aayog and advice the Cabinet on mode and quantum of disinvestment.

It would also lay down guidelines for evaluation by Evaluation Committee as well as recommend the terms and conditions of sale including transaction document, the price of sale and the strategic partner. It would also supervise and monitor the process of implementation of CCEA decisions on strategic disinvestment.

Appointment of intermediaries such as merchant bankers and legal advisors for the disinvestment would be done by an inter-ministerial group with Disinvestment Secretary as its head.
To revamp the role of the Disinvestment Department, Finance Minister yesterday announced the change of name of the department to Department of Investment and Public Asset Management (DIPAM).

Explaining the strategic sale policy, Gupta said once the NITI Aayog decides on the PSU, it would be taken for approval by a competent authority following a 3 tier structure.
There will an evaluation committee, supported by the administrative ministry, which can suggest multiple methods for valuation of CPSE and the mode would vary for various PSUs.
"Since the old policy was discontinued by the previous government, a mechanism and set of procedures for strategic sale has now been put in place," Gupta said.