Approving a new policy for disinvestment and strategic sale in central public sector enterprises (CPSEs), Finance Minister Arun Jaitley said they will encourage CPSEs to sell assets like land, manufacturing units for generation of resources. In his Budget speech for 2016-17, Jaitley said NITI Aayog will identify the CPSEs for strategic sale.
“We have to leverage the assets of CPSEs for generation of resources for investment in new projects. We will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their asset value for making investment in new projects,” Jaitley said. He further added, “We will adopt a comprehensive approach for efficient management of government investment in CPSEs by addressing issues such as capital restructuring, dividend, bonus shares, etc.” The Centre also renamed the Department of Disinvestment as Department of Investment and Public Asset Management, while setting the total target for disinvestment for 2016-17 at Rs 56,500 crore, out of which Rs 36,000 crore is estimated to be raised from minority stake sale in public sector companies, while Rs 20,500 is estimated to be raised from strategic sale.
Watch video: The Big Picture Of Arun Jaitley’s Budget 2016
After consistently falling short of disinvestment targets over the last six years, the government’s estimate from minority stake sale has been set only Rs 10,688 higher than the revised estimates for this year. The government has, however, revised its estimates for disinvestment proceeds sharply downwards for this financial year, with the government having been able to meet less than half the Budget estimates at Rs 25,312 crore as against the total target of Rs 69,500 crore.