The new Public Sector Enterprise (PSE) policy for Aatmanirbhar Bharat, which classifies public sector commercial enterprises as strategic and non-strategic sector, would be limited to central public sector enterprises, public sector banks and public sector insurance companies.
“The policy, however, does not apply to certain classes of public sector entities such as not-for-profit companies or CPSEs providing support to vulnerable groups or having developmental/promotional roles,” said the scope of the PSE policy announced in the Budget.
Finance Minister Nirmala Sitharaman in the Budget unveiled the Disinvestment/Strategic Disinvestment Policy, which had four strategic sectors in which “bare minimum” number of CPSEs will be retained and the rest would be privatised or merged or made subsidiary of another CPSE or closed down.
The four sectors are atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services in non-strategic sectors, CPSEs will be privatised, or will be considered for closure.
The classes of public sector entities which would be out of the scope of the new PSE policy include public sector entities in the nature of development and regulatory authorities, autonomous organisations, development financing or refinancing institutions.
Major port trusts and Airport Authority of India, set up under the Acts of Parliament, would not fall within its ambit.
Further, CPSEs concerned with providing support to vulnerable groups through financing of SCs, STs, minorities, backward classes and safai karmacharis etc, or manufacturing aids and appliances for Divyangs or those assisting farmers in mainly getting access to seeds, promoting innovation in agriculture, or procurement and distribution of food for Public Distribution System would not be covered under the policy.
The policy would not extend to CPSEs involved in security printing and minting, or maintaining critical data having bearing on the national security.
Also departments of the Government, like Railways and Posts, that undertake commercial operations with a development mandate would not be within the scope of the PSE policy.
The PSE policy states that NITI Aayog will recommend the CPSEs under strategic sectors that are to be retained under government control or to be considered for privatisation or merger or putting under the control of another PSE or for closure.
The alternative mechanism for strategic disinvestment, comprising Finance Minister, Road Transport Minister and Ministers of the Administrative Ministries willl give final approval for the CPSEs to be retained, or privatised or merged or made subsidiary or closed down.
The Department of Investment and Public Asset Management, which manages government equity in public sector companies, will approach the Cabinet for strategic disinvestment of a specific PSE from time-to-time, on a case-to-case basis.
The budget has set a target of Rs 1.75 lakh crore to be mopped up from disinvestment. Of this, Rs 1 lakh crore is estimated to come from sale of government stake in PSU banks and insurance companies and Rs 75,000 crore from CPSE stake sale.