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The Finance Minister has stated that she is not selling family silver but strengthening it. Is it true?

Department of Investment and Public Asset Management (DIPAM) states that four significant areas of its work relate to strategic disinvestment, minority stake sales, asset monetisation and capital restructuring.

Strategic disinvestment, which is at its heart, claims DIPAM would imply the sale of a substantial portion of the Government shareholding of a Central Public Sector Enterprise (CPSE) of upto 50% or such higher percentage as the competent authority may determine along with transfer of management control.

Two examples I would like to quote are, Videsh Sanchar Nigam Ltd which became Tata Telecommunication Ltd and Indian Petro Chemicals Ltd which was subsumed by Reliance Petro Chemicals.

The new disinvestment policy has classified enterprises as strategic and non-strategic.

​The strategic sectors are

i. Atomic Energy, Space and defence
ii. Transport and Communications
iii. Power, Petroleum, Coal and Minerals
iv. Banking, Insurance and Financial Services.

In these sectors bare minimum presence will be there of Govt and remaining will be considered for privatisation or merger or subsidiarisation with another PSE or for closure.

​PSEs in non-strategic sectors shall be considered for privatisation, where feasible otherwise such enterprises will be considered for closure. The Finance Secretary has stated that 151 PSEs will be privatised or sold.

​Under minority stake sale, Govt retains more than 51% holding and management. In 2020-21 alone, the following companies were disinvested under this scheme.

​BOL, HAL, MDL, IRCTC, SAIL, IRFC and a few others. We have seen earlier that after minority stake sale initially, the entire enterprises have been sold off.

​Asset Monetisation is a creation of new sources of revenue by unlocking the value of hitherto unutilised or under-utilised public assets.

​Ten foreign consultancy firms like BCG, KPMG, Deloitte etc. are enlisted as consultants for the same. This is self-reliance?

​The assets include land, buildings and even sports stadium which will be sold or leased to the private sector.

​Capital Management, in short, appears to be getting more dividend from PSEs.

​Remember that the NDA-I Govt started a Ministry for Disinvestment.

​Now, though the Govt says they are not privatising Railways, Rail Vikas Nigam Ltd, CPSE-ETE, IRCTC, Bharat 22 ETF, RITEs Ltd, MOIL Ltd, Mazagon Dock Ship Builders Ltd, THDC India Ltd, North Eastern Electric Power Corporation Ltd, Kamaraj Port Ltd, Security Printing and Minting Corporation India Ltd were listed for disinvestment in 2019-20.

​Now, the Govt shareholding in Kamarajar Port and Mazagon Dock Shipbuilders Ltd has become Zero. In HAL it is 75.15%, Bharat Dynamics 74.93%, RITES Ltd 72.2%, IRCTC 67.4%, NTPC Ltd 67.4%, SAIL 65% and Indian Railway Finance Ltd 86.36% . Sooner or later all these are likely to be totally privatised.

​As per the Public Enterprises Survey 2018-19 the PSEs had a net profit of Rs. 142,95,130 lakhs which is on the increase every year. Their contribution to the Central Exchequer in 2018-19 is Rs.368,80,293 lakhs which is also increasing steadily.

​Investment in Central Govt Enterprises is Rs. 275,69,727 lakh. They employed 10,32,846 staff which was 11,35,675, two years ago.

​Internal Resource Generated was Rs. 18,07,592 lakhs. Internal Resources Utilised as % of fixed assets was Rs. 737,44,118 lakhs. Foreign Exchange earned was Rs. 143,37,696 lakhs. Out of 10,31,049 employees there were 1,80,780 SCs, 1,01,627 STs and 1,97,428 OBCs. The reservation policy ends with Privatisation.

​Their procurement from MSEs was Rs. 38,65,806 lakhs. Their Capital Expenditure is more than the Capital Expenditure of the Central Budget often. 

​They are family Silver.

​Madam Finance Minister, you are not strengthening them but killing them. This is killing the golden goose. Farmers have understood this. People of the country will realise it soon.

Thomas Franco is former General Secretary of All India Bank Officers’ Confederation.

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Rajendiran R
Rajendiran R
20 days ago

Super Comrade