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Government to soon take new divestment policy to the Cabinet

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Government to soon take new divestment policy to the Cabinet

The government will soon take the new divestment policy to the Cabinet for its nod, sources told CNBC-TV18 on Wednesday, adding that the exchange-traded funds (ETFs) are the preferred route for divestment for now.
The important point to note is that the finance ministry will be required to seek Cabinet nod every time it decides to bring its shareholding below 51 percent in any of the Central Public Sector Enterprises (CPSEs).
In order to make its task easier, the finance ministry may look at a consolidated approach — consolidated nod from the Cabinet by clubbing five or ten CPSEs together in which it intends to bring the shareholding below 51 percent.
The government is giving a clear indication that it is willing to realign its own shareholding in CPSEs on the lines of promoters in the market.
The government on Friday hiked its disinvestment target in the current fiscal from Rs 90,000 crore to Rs 1.05 lakh crore.
The hike in the sell-off target comes amid the slow growth in tax proceeds, forcing the government to raise revenue from non-tax revenue sources.
The 2017-18 disinvestment proceeds were above Rs 1 lakh crore. In 2018-19, the sell-off mop up fell to Rs 85,000 crore.
Sitharaman said the government will continue with strategic divestment of select Central Public Sector Enterprises (CPSEs) and will modify the present policy of retaining 51 percent stake in PSUs.
(With IANS inputs)
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