The group of ministers (GoM) that decides on privatisation of the state-owned companies, will now also take decisions on the timing, price and quantum of shares of a company to be put on the block. The Cabinet Committee on Economic Affairs (CCEA) decided on Thursday to delegate these responsibilities to an Alternative Mechanism (AM).
Finance Minister Arun Jaitley, Road Transport Minister Nitin Gadkari and the minister representing the administrative department, whose public sector unit (PSU) is up for strategic sale will be a part of the AM. For example, in the case of strategic sale of Pawan Hans, the AM will have Jaitley, Gadkari, along with Civil Aviation Minister Suresh Prabhu, and will decide on when to sell the company, at what price, and how many shares will be offloaded. The buyer will also be decided and approved by it.
"The CCEA has approved delegation of the following Alternative Mechanism in all the cases of strategic disinvestment of Central Public Sector Enterprises (CPSEs) where the CCEA has given 'in principle' approval for strategic disinvestment," an official statement said.
The CCEA, headed by Prime Minister Narendra Modi, on Thursday decided to allow the AM to take the decisions the mode of sale and final pricing of the transaction or lay down the principles/guidelines for such pricing, and the selection of strategic partner/buyer, terms and conditions of sale, said the statement.
The AM will also decide on the proposals of the core group of secretaries on disinvestment with regard to the timing, price, the terms and conditions of sale and any other related issues.
"This will facilitate quick decision-making and obviate the need for multiple instances of approval by CCEA for the same CPSE," the statement said.
There are about 30 state-owned companies, including Air India, that the Narendra Modi government wants to sell off completely or give up majority stakeholding of. For 2018-19, Dredging Corp is on its way of being sold to a consortium of four port companies. Two of three other firms — Pawan Hans, Central Electronics and Scooters India – are also likely to be privatized.