Government to seek outsider help for strategic stake sale

NITI Aayog to enlist help of subject & domain experts for sale of assets in PSUs

The National Institution for Transforming India, or NITI Aayog, is planning to get experts and agencies from outside the government to frame the criteria for strategic sale in assets.

Confirming the plans, a senior officer said the government would finalise the framework for the strategic sale after consulting with experts.

In the current financial year (2015-16, or FY16) - which ends with this month - strategic sales could not take off, despite a Budget Estimate (FY15) of Rs 28,500 crore.

The officer said the NITI Aayog, the Union government's primary think tank which has been given the job of identifying public sector units (PSUs) for strategic sales, held its first meeting on it recently. Some PSUs were discussed during the meeting.

However, a decision was taken to widen the scope of consultations, which would mean involving subject and domain experts before finalising proposals.

Finance Minister Arun Jaitley, during his speech while presenting the Union Budget for 2016-17, had said the NITI Aayog would identify PSUs that are eligible for privatisation.

While presenting the Budget on February 29, Jaitley had announced that to revive the strategic stake sale of PSUs, the department of disinvestment had been revamped and renamed as the department of investment and public asset management, or Dipam.

The department of disinvestment was carved out of the finance ministry in 1999.

The Centre has already released a broad policy on disinvestment. According to this policy, the recommendations made by the NITI Aayog would be examined by an inter-ministerial panel. The panel would advise the Cabinet on the mode and quantum of disinvestment.

The Dipam secretary will head the panel.

Sources said once a formal structure is in place, help could also be sought from the proposed National Investment Commission, after it is constituted. In the Budget speech, Jaitley had said assets of central public sector enterprises, or CPSEs, could also be divested for investment in new projects.

"We will encourage CPSEs to divest assets such land, manufacturing units, etc, to release their asset value for making investment in new projects," he had said. The NITI Aayog's role would be confined to strategic sales.

The government had projected Rs 28,500-crore inflow from strategic sales this year (FY16), but that did not happen. The Budget for the next financial year (FY17) has projected a lower Rs 20,500 crore. Over the years, realisations of disinvestment have fallen short of projections. In 2014-15, inflow from disinvestments was pegged at Rs 43,425 crore, but only Rs 32,620 crore could be realised. Also, stake sale of specified undertaking in companies such as ITC, Axis Bank and L&T were pegged at Rs 15,000 crore, but none of it materialised.

Disinvestment target of Rs 41,000 crore was set for the current financial year (FY16), but only Rs 25,000 crore is expected to come.

For the next financial year (FY17), the disinvestment target is Rs 36,000 crore.