PSU Staff against Disinvestment

New Delhi, June 26.  The Centre is likely to start the process of strategic disinvestment in loss-making public sector enterprises (PSEs) by next month even as an influential forum of the executives of these businesses has flayed the move and threatened agitation.

“NITI Aayog has submitted a preliminary report on the divestment of the government’s stake in some PSEs and strategic sale of units which are sick,” an official source told IANS on Sunday.

The report has been forwarded to the Prime Minister’s Office (PMO) with a note from the Department of Investment and Public Asset Management (DIPAM).

“The final shortlisting of central government-owned PSEs for disinvestment may be cleared by an executive order after a cabinet meet,” the source said.

After the presentation of the union budget for 2016-17, the NITI Aayog had started deliberations in March this year to identify state-run firms where the government can give up its stake.

The budget, presented by Finance Minister Arun Jaitley, had enunciated “a new policy for management of government investment in public sector enterprises”.

Aiming to generate Rs 56,500 crore through disinvestment in PSEs this financial year, the new policy proposed “disinvestment and strategic sales”.

“We will encourage central PSEs to divest individual assets like land, manufacturing units, etc., to release their asset value for making investment in new projects,” Jaitley said in his budget speech.

The NITI Aayog, as directed by Prime Minister Narendra Modi and in coordination with DIPAM and other stake holders, has tried to shortlist the PSEs for strategic sales.

In its report, now forwarded to the PMO, the NITI Aayog has reportedly suggested that of the 74 sick PSEs about 20 should be wound up and the remainder should go for strategic disinvestment.

Meanwhile, National Confederation of Officers’ Associations, an influential body of senior officers of PSEs, said in a statement that the government is showing “a complete lack of understanding of the purpose and role of the public sector in India”.

“We are told the government and the NITI Aayog favour closure and strategic sales of 74 sick central PSEs. We can stage dharna and start agitation,” an office-bearer of the NCOA said, adding national executive committee members of the confederation will meet next month to work out their course of action.

“The association office-bearers and members may even stage a foot march in New Delhi at the end of June,” he said.

The government and NITI Aayog officials have, however, maintained that the disinvestment route is being proposed as huge amount of government stakes is “sinking” into the sick PSEs year after year.

Sources said the government may also revisit some of the “privileges and perks” given to employees and executives of PSEs resulting in a situation where income of middle-level workers often surpasses that of chief secretaries of states.

Of the Rs 56,500 crore the government wants to collect through disinvestment in PSEs, the finance ministry has already earmarked Rs 36,000 crore as estimated to come from minority stake sale in PSEs.

During 2015-16, the government could manage to meet less than half the budget estimates at Rs 25,312 crore as against the target of Rs 69,500 crore.

The income through selling stakes in public companies in 2014-15 was however about Rs 24,000 crore, an official source said.