NITI Aayog has submitted its first list of 12 PSUs (Public Sector Undertakings) to be privatized; kicking off the privatization.
Key Points
- The list submitted by NITI Aayog includes PSUs in strategic sectors and insurance companies.
- The list will be reviewed by the Department of Investment and Public Asset Management (DIPAM), and the Core Group of Secretaries on Divestment (CGD), headed by the cabinet secretary.
- The list comes after the announcement made by Finance Minister Nirmala Sitharaman in Budget 2021.
- This will also pave the way for the Centre to move forward with its Rs 1.75 lakh crore disinvestment target for the next financial year.
- Finance Minister had announced privatizing two PSBs and one general insurance company in 2021-22 in her budget speech.
- As per the new PSE (Public Sector Enterprise) policy for Atmanirbhar Bharat, NITI Aayog has been given the responsibility to suggest the names of PSUs in strategic sectors to be privatized, merged, or made subsidiaries of other PSUs.
- The strategic sectors, in which the Centre wants to reduce the presence or keep a “bare minimum” presence, are petroleum, coal, power, and other minerals, space, atomic energy, defense, banking, financial services, and insurance, transport, and telecommunications.
- PSEs functioning as regulatory authorities, autonomous organizations, trusts, and development financing institutions like the AAI (Airports Authority of India) and FCI (Food Corporation of India) and have been kept out of the policy.
- PSUs in non-strategic sectors like steel and hospitality would be either privatized or closed.
- Once the NITI Aayog’s recommendations are considered by CGD, it will give its suggestions to the Alternative Mechanism (AM), which includes the minister for roads, transport, and highways, the finance minister, and the minister for administrative reforms.
Once endorsed by the Alternative Mechanism, DIPAM will move a proposal to get in-principal approval from the CCEA (Cabinet Committee on Economic Affairs) for strategic disinvestment in a PSU case by case.
