We want to have them to run far more efficiently: Nirmala Sitharaman
Finance Minister Nirmala Sitharaman on Friday said the disinvestment does not intends to shut down any public sector companies but to make them more efficient and professionally driven.
“The principle with which disinvestment is happening now is not to shut down a unit. The economy needs that many number of such companies and many, many more as well. So if we want to have that activity done professionally and open up spaces for people to come and do it, our interest is not to shut down, we want to prime it up, we want to have them to run far more efficiently so that contributions can be made to the economy,” Sitharaman said in her webcast speech from Bengaluru in an event organised by Department of Investment and Public Asset Management (DIPAM).
Principle of disinvestment
Highlighting that public sector enterprises that were privatised between 1994 and 2004 are being driven by professionally run boards, the minister said these companies have only improved. She said the principle of disinvestment is to make sure that companies which are being privatised are in the hands of people who can run it, bring in more capital and give same production. “So it’s not to close down but to bring in opportunity for better and more investments to be made,” Sitharaman said.
The government has also lined up over half a dozen companies for strategic sale. These include Shipping Corp, Concor, Vizag Steel, IDBI Bank, Nagarnar Steel Plant of NMDC and HLL Lifecare. So far in the current fiscal year, the government has mopped up over ₹24,000 crore from CPSE disinvestment. The target for full fiscal year has been set at ₹65,000 crore. In last fiscal year, over ₹13,500 crore was realised via CPSE disinvestment, which also include amount realised via privatisation of Air India.
The minister further said CPSE Bharat Bond ETF constitutes about 84 per cent of all Exchange Traded Funds in the market. The AUM (asset under management) under Bharat Bond ETF stands at over ₹53,000 crore.