Asset management: Pay special dividend or list: Govt to cash-rich public firms

Renamed disinvestment dept to decide which PSUs are eligible to get listed.

By: ENS Economic Bureau | New Delhi | Published: March 5, 2016 1:56:02 am

Having renamed the disinvestment department as Department of Investment and Public Asset Management (DIPAM) in Budget 2016-17, the government now wants unlisted public sector companies with huge cash piles to consider paying special dividend or buy back government shares and gradually move towards listing.

“Public asset management would also include buyback of shares. Companies which are 100 per cent owned by the government, which have lots of cash, if they do not have capital expenditure plan and they are sitting on idle cash year after year, they should either pay special dividend or buyback government shares,” Economic Affairs Secretary Shaktikanta Das said at a Ficci event here.

The government has redefined the responsibilities of disinvestment department with the rechristened DIPAM to include efficient management of the government investment in CPSEs through capital restructuring, dividend, bonus shares and monetisation of idle assets.

“This department (DIPAM) is going to take a comprehensive view of the management of government investments and government assets,” Das said.

DIPAM would be entrusted with the task of deciding which PSUs are eligible to get listed, in order to realise its true value in the market, he added.

The Secretary said the disinvestment target for next fiscal has been carefully set and will be achieved.
“2016-17 disinvestment target has been very carefully worked out. We are quite confident that disinvestment target will be achieved and it is quite reasonable. Rs 20,500 is a very reasonable target which will be achieved,” Das said.

After having missed the disinvestment target from last six years, the government has fixed a disinvestment target of Rs 56,500 crore for 2016-17, out of which Rs 36,000 crore is estimated to be raised from minority stake sale, while Rs 20,500 crore is estimated to be raised from strategic stake sale.

On the persistent NPA problem in public sector banks, Das said the central bank and finance ministry are working together and the problem is being very meticulously and carefully addressed.

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