PSU stake sale: Govt begins consultations to sell loss-making public companies

Government has put the strategic sales of PSUs on the fast track and has begun consultations for putting a framework to outline a process for the same.

Zee Media Bureau

New Delhi: The government has begun the process of inter-ministerial consultations for putting a framework to sell loss-making and non-strategic public sector units.

According to The Economic Times report, a Cabinet note circulated recently has proposed a three-tier mechanism overseen by the cabinet secretary to put strategic sales on the fast track, signalling that the NDA's reversal in the Bihar Assemble elections has not derailed the path to economic reforms in the country.

The government had announced a wide-ranging relaxation in foreign direct investment rules on Tuesday.

The cabinet secretariat has put loss-making state-run companies into three categories: 

1) Companies that can be revived with financial and managerial help.

2) Those that can be revived by taking on a private sector partner.

3) Those that need to be closed down and their assets sold.

According to the report, ministries will be asked to evolve criteria to select companies that need to be privatised. The government has already started work on divesting stakes in IDBI Bank. The sale of state-owned hotels is also likely to taken up aggressively. 

The consultations are likely to be wrapped up within a couple of weeks and the mechanism should be in place in a month, quoting a senior government official, said the report. 

The government is looking to raise a record Rs 69,500 crore from asset sales this year.