Ministry of finance lists 28 PSUs for divestment

The government may now look at disinvestment in public sector undertakings (PSUs) across the services sector.

“Besides loss-making units, even profit-making PSUs can be completely or partially disinvested,” says a policy paper initiated by the department of economic affairs of the ministry of finance.

The paper has listed out 28 PSUs in the services sector for disinvestment, including Bharat Sanchar Nigam (BSNL), Engineers India (EIL) and MMTC, which are awaiting Cabinet nod for disinvestment.

The list includes five PSUs under the commerce ministry (PEC Ltd, EIL, State Trading Corp, MMTC and India Trade Promotion Organisation).

The shipping ministry has an equal number of PSUs in the list —- Shipping Corp, Dredging Corp, Cochin Shipyard, Mazagaon Dock and Hindustan Shipyard.

The railway Ministry has four —- Indian Railways Catering and Tourism Corp, Central Warehousing Corporation, IRCON International, and RITES.

The communications ministry has three —- Telecommunications Consultants of India, BSNL, Mahanager Telephone Nigam.
PSUs under other ministries on the list are, water resources (Water & Power Consultancy), steel (MSTC, MECON), urban development (National Building Construction Corp or NBCC), petroleum (Balmer Lawrie), defence (Goa Shipyard Ltd), heavy Industries (Engineering Projects), HRD (Educational Consultants), science & technology (National Research Development Corporation), and information and broadcasting (National Film Development Corporation, or NFDC, and Broadcast Engineering Consultants India).

Among these PSUs, disinvestment could possibly be initiated immediately in the case of RITES, Shipping Corporation of India, Engineers India, Engineering Projects India, State Trading Corporation, MMTC and ITPO, according to the finmin view. “In the case of ITPO, exporters and even Exim Bank of India could have a stake,” it has said.

As for NBCC and NFDC, the paper has suggested that there could even be full sale of the companies. NFDC is a loss-making company and there’s no need for the government to be in the films sector, according to the paper.

These disinvestments would not only yield sizeable revenues for the government, but also make these companies more efficient, contributing to the growth process, the finance ministry paper has said.

According to Kaushik Basu, chief economic advisor to the finance ministry, the objective of the policy paper is to improve economic analysis and promote evidence-based policy formulation.

Only last week, the Cabinet Committee on Economic Affairs cleared the proposal of 20% disinvestment in state-run Steel Authority of India Ltd through a follow-on public offer and issue of fresh equity.

The UPA government plans to raise at least Rs 40,000 crore in the current fiscal by increasing the public holding in PSUs. In the previous fiscal, the government had fallen short of its disinvestment target. The government wants to bridge its fiscal deficit through the disinvestment proceeds.