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Govt sets up mechanism to speed up strategic stake sale in CPSEs

SNS | New Delhi |

In order to expedite the process of strategic disinvestment in central public sector enterprises (CPSEs), the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi on Wednesday approved setting up of an alternative mechanism.
The alternative mechanism body will be chaired by Union Finance Minister Arun Jaitley with Minister for Road Transport and Highways Nitin Gadkari and the minister of the administrative department as its members. The new mechanism will decide on matters relating to terms and conditions of the sale from stage of inviting of expression of interest till inviting of financial bids.

The new mechanism will also empower the Core Group of Secretaries (CGD) to take policy decisions on procedural issues and to consider deviations as necessary from time to time for effective implementation of decisions of CCEA, the official statement said.

The government has set an ambitious target of Rs 72,500 crore for disinvestment in 2017-18 including Rs 15,000 crore from strategic disinvestment. In the current year so far, the government has raised Rs 4,153.65 through divestment of strategic holdings and income from management of SUUTI investment, as per data from the Department of Investment and Public Asset Management (DIPAM). The government holds equity in companies including L&T, ITC and Axis Bank through Specified Undertaking of UTI or SUUTI.

The government has raised total disinvestment proceeds of Rs 8,427.59 crore as on 3 August, the DIPAM data shows. Earlier, the government had set up another alternative mechanism with the same composition to decide on quantum of disinvestment in case of minority stake sale in CPSEs.
Jaitley is also heading another alternative mechanism to decide on privatisation of the national carrier Air India. The CCEA has given in principle approval for the privatisation and has asked the Jaitley panel to decide on treatment of unsustainable debt of Air India, hiving off of certain assets to a shell company, demerger and strategic disinvestment of three profit-making subsidiaries and the quantum of disinvestment and the universe of bidders.

This year the government has shortlisted Bharat Earth Movers Limited, Scooters India and Pawan Hans Limited, three units of Steel Authority of India Limited (SAIL) for strategic disinvestment.

The CCEA also gave its approval to the scheme of providing budgetary support under the Goods and Service Tax (GST) regime for eligible industrial units in Jammu and Kashmir, Uttarakhand, Himachal Pradesh and north eastern states including Sikkim. “Industries in the north eastern and Himalayan states will continue to get tax exemption till March 2027, albeit as refund, under the current GST regime which was rolled out on July 1,” Jaitley said.