New Delhi, November 26, 2015: Pushing through with its plan to sell a majority stake in sick and loss-making public sector units, the Centre is understood to be working on a list of about 50 such PSUs. Hotels under ITDC could be the first on the block.
“A strategic sale of some ITDC hotels could take place this fiscal. There is a case for their sale as these are loss-making units and non-core functions taken up by the government,” said a senior official, adding that the Finance and Tourism Ministries have been discussing the issue.
The Tourism Ministry is understood to have identified eight loss-making ITDC hotels, including properties in Jaipur and Bhubaneswar.
Additionally, the government has reviewed a list of nearly 50 PSUs that can be considered for strategic stake sale, the official said, adding that sick units identified by the Department of Public Enterprises for revival and closure would also be considered for the purpose.
A policy is also being worked out to use the land-bank available with such sick firms, the official added.
The move comes even as the Finance Ministry is working to revive the Disinvestment Commission that was operational under the earlier NDA government. The Commission is was mandated to identify sick PSUs and initiate strategic stake sale. Outlining the Narendra Modi government’s intent to revive strategic stake sale in, and privatisation of, PSUs, Finance Minister Arun Jaitley had set a target of raising ₹28,500 crore through such transactions in Budget 2015.
Cabinet note
The Department of Disinvestment is understood to have finalised a Cabinet note outlining the role of the proposed commission and the mechanism for strategic sale.
“The proposal has been finalised and it is likely to be taken up by the Union Cabinet over the next few weeks,” said a Finance Ministry official, adding that the Board for Reconstruction of Public Sector Enterprises (BRPSE) has already been wound up.
The proposed commission will be a permanent body led by the Cabinet Secretary, and include top officials from nodal ministries who would work on strategic sales.
A case-by-case decision would be taken on whether the government should sell a majority stake in the PSU or completely exit it.
The earlier NDA government had sold a majority stake in a number of PSUs including Modern Food Industries, Bharat Aluminium, Hindustan Zinc and some ITDC properties between 1999 and 2004.– BusinessLine
