Modi government has lined up an ambitious disinvestment route map as one of the ways to clamber out of the financial morass the central government finds itself in following the economic pains of the pandemic lockdown. On offer, beside already known and high-profile names like Air India and BPCL, include the likes of India Tourism, Shipping Corporation of India and others.
In this year’s Union budget, the government had fixed a target of 2.1 lakh crore rupees to be earned from disinvesting public sector units (PSU)
The NDA government has been pretty cautious in its approach to disinvestment so far, initially trying to straddle the middle-path of going in only for selling off minority stakes or those that are loss-making. However, these ideals are now taking a backseat, as a desperate government looks for ways to shore up its finances. Finance minister Nirmala Sitharaman had clarified in July-end that the cabinet had cleared stake sale process of about 23 public sector companies. An RTI query by Chandigarh native Aman Sethi has now seen the department of investment and public asset management clarifying that there are originally 26 PSUs in the list.
The companies scheduled for disinvestment, beside well-known ones like Air India and Bharat Petroleum (BPCL) include Pawan Hans, Shipping Corporation of India, Container Corporation of India. Cement Corporation of India, India Tourism Development Corporation (ITDC), Project & Development India Limited, Engineering Projects India Limited, B&R, Central Electronics, Indian Medicine & Pharmaceuticals Corporation, four Steel plants (Salem, Bhadrawati, Durgapur & Nagarnar Steel Plant of NDMC)), Ferro Scrap Nigam, Bharat Earth Movers, Hindustan Latex Lifecare, , Nilachal Ispat Nigam, Hindustan Prefab, Bharat Pumps and Compressors, Scooters India, Hindustan Newsprint, Karnataka Antibiotics & Pharmaceuticals, Bengal Chemicals & Pharmaceuticals, Hindustan Antibiotics and Hindustan Flurocarbon.
The timelines for disinvestment are not known — while there is an urgent need for fresh sources of income for the government post the economic slowdown and Covid pains, there are also questions on whether sales during a dull phase of the economy will get good valuations. Air India disinvestment, for example, has been lagging on and on, with deadlines being extended due to lack of buyer interest. Last fortnight, deadline for Expression of Interest (EoI) was again extended, this time to October 30.
Interestingly, the RTI reply refused to clarify the percentage of stake that would be up on offer in each of these companies. While with Air India it is public knowledge, the official explanation is that this is dependent on market conditions and that revealing this until the sale is done is exempt under the RTI Act.
The disinvestment of Life Insurance Corporation of India (LIC), mentioned by the finance minister in her budget speech earlier this year, was not mentioned in the list. Nor did Indian Railways or any of its wings — there were rumours in recent weeks that some rail bodies, like IRCTC, may be up for grabs.
The first NDA government, under prime minister Vajpayee and disinvestment minister Arun Shourie had gone in for a wave of disinvestment in PSUs, most notably Videsh Sanchar Nigam Limited (VSNL) as well as all the hotel properties (except the Delhi Ashoka) of ITDC. The policy of disinvestment was shelved once NDA was voted out in the 2004 general elections.