Despite a near Rs 30,000 crore target from strategic stake sales this fiscal, the government is likely to follow a more diffused approach for divesting majority holding in public sector units.
Instead of a formal policy on strategic sales by the government, line ministries are expected to identify PSUs where majority stake can be divested and take these proposals for Cabinet approval.
“As of now, there is no discussion on a preparing a formal policy on strategic sales. What is happening is that each of the nodal ministries are finalising their plans independently,” said a senior government official, adding that the department of disinvestment and the finance ministry are not involved in these proposals.
Accordingly, while the ministry of tourism is independently working on plans for transfer of majority stake or management control in loss making ITDC hotels, the ministry of heavy industries is also understood to be working on a proposal for using land banks of loss-making PSUs.
“Consultations are on for these proposals but the finance ministry is not working on these,” said the official.
The Union Budget has set a target of Rs 69,500 crore from disinvestment in public sector unit this fiscal, of which Rs 41,000 crore would come from minority stake sale and Rs 28,500 crore from strategic stake sale.
Soon after the presentation of the Budget, finance minister Arun Jaitley had in March this year said the government has drawn a list of state-owned companies which will be put on block for strategic sale and had later indicated that these could include loss making PSUs of the ITDC.
The tourism ministry is understood to have identified eight loss making hotels of the ITDC including properties in Jaipur and Bhubaneshwar. The previous NDA government, between 1998 and 2004, went ahead with strategic sales of a number of loss-making PSUs including Bharat Aluminium, Hindustan Zinc, some ITDC hotels. According to an earlier report by the CLSA, while the NDA government raised Rs 33,000 crore ($5.5 billion) through stake sales, the UPA has raised Rs 1.26 lakh crore ($21 billion) in its tenure at the Centre.