Cabinet allows PSU boards to suggest disinvestment, closure of subsidiaries, units

File image of Prime Minister Narendra Modi chairing a Union Cabinet meeting. (Image: PIB)

The Union Cabinet on May 18 approved a proposal to allow the board of directors of public sector undertakings (PSU) to recommend and undertake the disinvestment or closure of their subsidiaries, units, or stakes in joint ventures (JV).

Until now, while the boards could make equity investments to set up financial JVs and wholly-owned subsidiaries and undertake mergers and acquisitions subject to certain conditions. They largely had no control over the disinvestment and closure of their subsidiaries, units, or JV stakes.

"In line with the spirit of the new PSE (public sector enterprise) policy, 2021 to minimise the presence of government PSEs and for functional requirement, further delegation in this matter has been provided through this decision," the government said in a statement.

The Alternative Mechanism comprises Finance Minister Nirmala Sitharaman, Minister for Road Transport and Highways Nitin Gadkari and Civil Aviation Minister Jyotiraditya Scindia.