The North Block of Central Secretariat building which houses the Ministry of Finance and Ministry of Home Affairs, in New Delhi, India (Prashanth Vishwanathan/Bloomberg News)

Finance Ministry Eyes Part Of Non-Core Asset Sale Proceeds Of CPSEs As Dividend

The Finance Ministry is working out a mechanism under which central public sector enterprises will have to part with a portion of the proceeds of non-core asset sales as dividend to the exchequer, an official said.

However, proceeds from the non-core asset sales of state-owned companies which are candidates for strategic disinvestment and funds raised through sale of immovable enemy property will be treated as “disinvestment proceeds”, the official said.

The Cabinet had last week approved laying down of procedure for monetisation of non-core assets of CPSEs, including those which are up for strategic sale. It had also cleared the proposal for sale of immovable enemy property.

NITI Aayog has been asked to draw up a list of non-core assets of CPSEs, whether profit-making or loss-incurring, for possible monetisation.

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Modalities for monetisation of non-core assets of healthy as well as sick CPSEs are being worked out so that a portion of the amount can be realised by the government as dividend. Such a mechanism would provide incentive to the company to go ahead with asset sale with rewarding the government as promoter of these CPSEs, the official said.

The government has budgeted Rs 1.36 lakh crore as ‘dividends and profits’ in the next fiscal, up from Rs 1.19 lakh crore in 2018-19. The amount includes the money received as dividend from CPSEs and surplus transfers from the Reserve Bank.

The official said while the procedure for monetisation of non-core asset is being finalised, the actual process is likely to begin in the second half of the next fiscal.

In order to expedite the process of asset sale, the Finance Ministry is planning to set up a special cell in the Department of Investment and Public Asset Management to coordinate with the company concerned and the Administrative Ministry as well as appoint transaction advisers.

For the next fiscal, the government has set a divestment target of Rs 90,000 crore, up from Rs 80,000 crore in the ongoing financial year.