Cabinet Approves Three-Minister Panel To Speed Up Strategic Stake Sales
CCEA approves alternative mechanism for strategic disinvestment.
The Cabinet Committee on Economic Affairs has approved a proposal to set up a panel of three ministers as an alternative mechanism to speed up strategic disinvestment at public sector companies.
The Department of Investment and Public Asset Management under the finance ministry proposed to set up a panel comprising Finance Minister Arun Jaitley, Road Transport and Highways Minister Nitin Gadkari and minister of the administrative department under which the stake sale of a company is to take place. The group would decide the quantum of stake to be sold, tranches through which it will be offloaded and the process involved.
The move gives more teeth to the Core Group of Secretaries on Divestment to take policy decisions for procedural issues involved in the sale. “The approval will help in speedy completion of strategic disinvestment transactions,” a statement from the Press Information Bureau said.
Strategic divestment in a public sector enterprise is a stake sale in which the government would reduce its shareholding up to 50 percent or more, along with transfer of management control.
Earlier, an alternative mechanism had been approved to decide the quantum of disinvestment in a particular state-owned company on a case-by-case basis subject to the government retaining 51 percent equity and management control.
Government has shortlisted Bharat Earth Movers Ltd., Scooters India and Pawan Hans Ltd., three units of Steel Authority of India Ltd. (SAIL) for strategic disinvestment this year.
It set an ambitious target of Rs 72,500 crore for disinvestment in 2017-18 including Rs 15,000 crore from strategic disinvestment. So far this year, the government has garnered around Rs 10,000 crore through stake sales.