Govt to divest holdings in defence PSUs

The government will divest its shareholdings in defence public sector undertakings (PSUs)—Mishra Dhatu Nigam Ltd (MIDHANI) and Garden Reach Shipbuilders and Engineers Ltd, apart from its shareholding in Bharat Earth Movers Ltd (BEML).

The Ministry of Defence (MoD) said this week that preliminary bids have been invited by the government to sell its 26% stake in BEML along with the transfer of management control. The government has a 74.5% stake in Garden Reach Shipbuilders, and 74% in MIDHANI.

The Union Budget 2021-22 rolled out a new privatisation policy for PSUs that divides public sector enterprises into strategic and non-strategic ones. The strategic sector includes space and defence, atomic energy, coal and other minerals, transport and telecommunications, power, petroleum, insurance, financial services and banking.

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In strategic sectors, the “bare minimum” presence of existing public sector commercial enterprises at holding company level will be retained under government control. The remaining will be considered for privatisation or merger or subsidisation with other public sector enterprises or closure.

PSEs in non-strategic sectors will be considered for privatisation wherever possible, or considered for closure.

Image: Only a bare minimum of government control is envisioned in the new divestment policy for “strategic sectors”, including defence.

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