Govt releases new “Public Sector Enterprise Policy”

What is the news?

The Government of India has released a new ‘Public Sector Enterprise Policy’.

About ‘Public Sector Enterprise Policy’:

The policy classifies public sector commercial enterprises into the strategic and non-strategic sector:

Strategic Sector: There would be a maximum of four public sector companies in strategic sectors. State-owned firms in other segments would be privatized eventually.

The following 4 sectors are covered under strategic sectors:

1. Atomic energy, Space and Defence
2. Transport and Telecommunications
3. Power, Petroleum, Coal, and other minerals
4. Banking, Insurance, and financial services

Non- Strategic Sector: CPSEs of this sector shall be privatized or closed, if privatization is not possible.

Exceptions: The policy would not be applied on:

• Public sector classes like major port trusts, the Airport Authority of India, and undertakings in security printing and minting.
• Public sector entities such as not-for-profit companies or CPSEs providing support to vulnerable groups.

Process of Privatisation:

• NITI Aayog will recommend PSUs for retention in strategic sectors and that should be considered for privatization, merger, or closure.
• The Core Group of Secretaries on Divestment(CGD) headed by the cabinet secretary will consider these recommendations.
• Final approval will be provided by the Alternative Mechanism. This mechanism consists of the Finance minister, Ministers for Administrative reforms, and the Minister for roads, transport, and highways.
• Further, the Department of Investment and Public Asset Management (DIPAM),  can also approach the Cabinet for strategic disinvestment of a specific PSE from time-to-time. DIPAM manages government equity in public sector companies.

Source: The Hindu

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