Govt planning to slash stake in CPSEs to 49%: Report

The government is planning to cut its stake in central public sector enterprises (CPSEs) to 49 percent in three years, The Economic Times reports.

The proposal excludes state-run companies in sectors such as defence and oil.

Such a move will benefit state-run companies as their autonomy will increase. The government, too, could benefit as divesting could raise the stake of their remaining holding.

"The plan is to reduce government's stake in most CPSEs to at least 49% over the next three years besides ensuring that the boards of these firms are more professionally managed,"a senior government official told the paper.

"We must exit all companies except the ones that have some strategic importance," the source added.

NTPC Ltd, Steel Authority of India Ltd, and Power Grid Corporation are some of the companies where the government will likely reduce its stake, the report said.

NITI Aayog is identifying the companies for divestment.

The government owns 51 percent or more in over 250 CPSEs, the report said.

In areas such as defence and oil, the government will most likely retain a majority stake in companies such as Bharat Petroleum and Hindustan Petroleum.

"In some companies such as BPCL and HPCL, the government has to maintain at least 51% holding as a Supreme Court verdict in 2003 had restrained the government from privatising them," a source told The Economic Times.