Privatisation can be a cure not just for the government’s finances but for the companies too. The devil lies in the execution.
The government should seriously think of selling its stake in loss-making entities operating in the non-strategic sector
The Public Enterprises Survey, tracking the performance of CPSEs in 2015-16, revealed that the top three loss-making CPSEs -- SAIL, BSNL and Air India -- incurred a loss equal to 51.65 per cent of the total loss made by the top 10 loss-making CPSEs in 2015-16.
The government has allocated Rs 1,000 crore budgetary support to NIIF which will be leveraged to raise Rs 8,000 crore from strategic anchor partners, namely multilateral and bilateral institutions, sovereign wealth funds, pension funds and domestic public sector enterprises, according to Output Outcome Framework for Schemes 2017-18.
The government has managed to garner over Rs 23,500 crore through selling its stake in public sector enterprises during the first nine months of the current fiscal, representing nearly 60 percent of the disinvestment target, said Manish Singh, Joint Secretary, Department of Investment and Public Asset Management (DIPAM)
The government has set a disinvestment target of Rs 56,500 crore for the current fiscal. Of this, Rs 30,000 crore will come from minority stake sale and the remaining Rs 26,500 crore from strategic stake sale. It has already raised Rs 2,700 crore through 11.36 percent stake sale in NHPC.
Heavy Industries and Public Enterprises Minister Anant Geete said this in Rajya Sabha during the question hour after several members expressed concern over media reports suggesting that there have been misuse of CSR funds, especially by private companies.
The onus of kick starting the investment cycle in the economy is on the government. And the government is expected to act through the public sector companies.
The Centre is looking to garner Rs 22,000 crore by selling the assets of five sick central public sector enterprises (CPSEs) namely HMT Watches, HMT Chinar, HMT Bearing, Tunga Bhadra Steels and Hindustan Cable Corporation.
The Public sector enterprises (PSE) have been a major disappointment for the retail investors. Ironically, most of them have been have been titled 'Navratna' by the Indian Government, giving investors a false notion of safety and raising their expectations in vain.
HMT today submitted a revival plan of Rs 981 crore to the government. If the plan is accepted, it could well prove to be crucial to its turnaround plans.
The government is considering imposing strict measures, including a bond of at least Rs 10 lakh, to deter senior employees of public sector enterprises (PSEs) from joining private firms.