NITI Aayog lists 12 PSUs for privatisation
The government’s policy think tank—National Institution for Transforming India (NITI) also known as NITI Aayog, has submitted its first list of around 12 Public Sector Undertakings (PSUs) to be privatised as part of the country's privatisation drive.
The list submitted by NITI Aayog includes PSUs in strategic sectors. It will be reviewed by the Department of Investment and Public Asset Management (DIPAM). It comprises public sector banks (PSBs) and insurance companies and will be the think tank’s first, following the government privatisation drive for PSUs, as announced by Finance Minister (FM) Nirmala Sitharaman in the Budget 2021. This would pave the way for the government to go ahead with its Rs 1.75 lakh crore disinvestment target for the next financial year (FY).
In the Budget 2021, the Finance Minister had announced the privatisation of two PSBs and one general insurance company in 2021-22. As per the new Public Sector Enterprise (PSE) policy for AtmaNirbhar Bharat, NITI Aayog has been entrusted with the task to suggest names of PSUs in strategic sectors to be merged, privatised, or made subsidiaries of other PSUs.
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Meanwhile, PSEs functioning as autonomous organisations, regulatory authorities, trusts, and development financing institutions such as the Food Corporation of India (FCI) and the Airports Authority of India (AAI) have been kept out of the policy. PSUs in non-strategic sectors such as steel and hospitality would be either privatised or closed.
Once the NITI Aayog's recommendations are considered by the Core Group of Secretaries on Divestment (CGD), it will provide suggestions to the alternative mechanism (AM), which includes the finance minister, minister for administrative reforms and the minister for roads, transport and highways.
Once endorsed by the AM, the DIPAM will then move a proposal to get in-principle approval from the Cabinet Committee on Economic Affairs (CCEA) for strategic disinvestment in a PSU case-by-case basis administrative feasibility, sectoral trends, and interest of investors.
The strategic sectors, in which the Centre wants to keep a bare minimum presence and are to be privatised as per NITI Aayog’s list include: