A week ago, the government announced the sale of Central Electronics Limited to little-known Nandal Finance and Leasing for Rs 210 crore. The sale was the culmination of the government’s five-year-old struggle to divest its 100 per cent stake in the company, known for manufacturing solar cells and modules. This marked the second strategic privatisation this financial year after Air India. FY21 is turning out to be a pivotal year for the government’s privatisation program. To help with this, the government in July brought the Department of Public Enterprises (DPE) under the Ministry of Finance. It was previously under the Ministry of Heavy Industries and Public Enterprises. This move increased the Finance Ministry’s control over public sector undertakings (PSU) and quickened the implementation of privatisation proposals. The Department of Public Enterprises monitors the performance of PSUs and reviews their capital expenditure. Now, the Centre is set to rejig the privatisation process for companies in non-strategic sectors. This includes steel, tourism, urban development and healthcare sectors.
Under the new Public Sector Enterprises (PSE) policy, companies in such sectors will be considered for privatisation, wherever feasible. Else they would be shut down. The Department of Public Enterprises, now under the Finance Ministry, has been tasked with identifying the Public Sector Enterprises in the non-strategic sectors for this purpose. Its recommendations are then sent to the Department of Investment and Public Asset Management (DIPAM), which too comes under the Finance Ministry. Not just this, to create more value out of state-owned assets, the government has come up with a monetisation plan. The National Monetization Pipeline has been prepared by NITI Aayog. While the government has set a target of raising Rs 1.75 lakh crore through disinvestment in FY21, it has so far mopped up only about Rs 9,500 crore. Reports suggest that the big-ticket privatisation of Bharat Petroleum is likely to be completed next fiscal. But the Centre is looking to finalise the sale of at least four companies, including Shipping Corporation of India, BEML, Pawan Hans and Neelachal Ispat Nigam, by March 2022. With regard to the sale of two public sector banks, the government is starting to face pushback from employee unions. But the government, nevertheless, is going ahead with legislative amendments to facilitate the sale. This indicates that despite Covid-induced disruptions, the government’s disinvestment programme is on the right track.