Cabinet gives in-principle nod to PSU strategic stake sale

The Union Cabinet today gave in-principle approval to NITI Aayog's proposal for strategic sale of state-owned firms and entrusted DIPAM with the task of finalising the PSUs in which management control can be transferred to private players.

The Cabinet meeting, chaired by Prime Minister Narendra Modi, decided that the Department of Investment and Public Asset Management (DIPAM) would work out the broad methodology and valuation, thereafter fixing the base price for each of the PSU being put up for strategic sale.

Briefing reporters after the meeting, Finance Minister Arun Jaitley said the names of PSUs that are up for strategic stake sale would be made public on a case-to-case basis once the Cabinet decide to put them up for the auction.

"The recommendations of the NITI Aayog with regard to both disinvestment and strategic sale came up for consideration. In-principle the Cabinet has approved the recommendations with regard to some of the units," he said.

The government has Budgeted to raise Rs 20,500 crore via strategic stake sale of PSUs, but Jaitley said it would not rush to sell the companies in order to achieve the target.

"At the moment we are at the mid-point of the year and this year we have already made a significant headway in disinvestment... I am not going to allow it (PSUs) to be under sold merely because there is a calendar limitation," he said.

Besides strategic sale, government plans to raise Rs 36,000 crore through PSU minority stake sale. It has already raised Rs 8,632 crore through share buyback and Offer for Sale Jaitley said each PSU would be examined separately by DIPAM and the administrative ministry concerned and then a final view would be taken by the Cabinet on strategic sale.

"Some of these are important units and therefore since each unit would be considered on its own merit, the timing of that would be decided by the government accordingly... There are settled valuation processes and a transparent one would be followed," he said, adding today's Cabinet did not discuss NITI Aayog's list of PSUs which could be closed down.