Sale of PSUs gets Cabinet approval

The Union Cabinet on Thursday gave in-principle approval to the strategic sale of public sector undertakings (PSUs) as recommended by the NITI Aayog.

However, the government will consider each company specifically for final strategic sale, Finance Minister Arun Jaitley said.

Jaitley did not give any names, saying that each company will be considered individually for approval. He said the Department of Investment and Public Asset Management (Dipam) will consider each company on merit including the price and timing.

The government aims to raise Rs 56,500 crore in FY17 by selling stakes in state-owned enterprises, out of which Rs 36,000 crore will come from minority stake sales and Rs 20,500 crore from strategic stake sales.

 The last strategic sale took place in Jessop and Co in 2003-04, under the NDA government headed by Prime Minister Atal Bihari Vajpyaee, when 72% of the government stake was sold to Indo Wagon Engineering for Rs 18.18 crore.

Thereafter, strategic sale of Bharat Aluminium Company (BALCO), CMC, Hindustan Zinc (HZL), HTL, Indian Petrochemicals Corporation (IPCL), Indo Hokke Hotels, Jessop & Co, Lagan Jute Machinery Co (LJMC), Maruti Udyog (MUL), Modern Food Industries, Paradeep Phosphates, Punjab Hotels, Videsh Sanchar Nigam (VSNL), Hotel Units of Hotel Corporation of India and Hotel Units of India Tourism Development Corp were carried out.

According to the Department of Disinvestment, in the strategic sale of a company, the transaction has two elements — transfer of a block of shares to a strategic partner and transfer of management control to the strategic partner. Niti Aayog has approved 24 PSUs for strategic sale.