Updated: December 15, 2021 5:49:44 am
The Finance Ministry has released guidelines for the implementation of the new central public sector enterprise (CPSE) policy, aimed at the privatisation, merger, closure or subsidiarisation of non-strategic CPSEs. Under the norms, once the Union Cabinet or Cabinet Committee on Economic Affairs clears disinvestment or closure of a CPSE, it will be disinvested completely within seven months.
The Department of Public Enterprises (DPE) will identify CPSEs for closure or privatisation in non-strategic sector in consultation with administrative ministries or departments and seek approval from the CCEA. The administrative ministry of the concerned CPSE will work out the details of any proposed closure, including details of budgetary support required for financing the closure of the CPSE and updating of records of the movable and immovable assets of the CPSE.
The DPE will then prepare a note based on the inputs of the administrative ministry and submit it to an inter-ministerial committee, which will then vet the proposal before final approval is sought from the Finance Minister.
Post the final approval by the finance minister, the norms envisage a timeline of two months for the process, including settlement statutory dues, payment to secured creditors, settlement of VRS for employees, and transfer of assets to a holding company.
The guidelines also state that any directors or even the CMDs of the selected CPSEs that do not cooperate may be removed from their roles and replaced by officials from the concerned ministry. “If the Director(s) of the CPSE(s) fails to co-operate, the Administrative Ministry/ Department can take a view on removing the Functional Directors including the CMD and give additional charge of the CMD to the Joint Secretary concerned and charge of Functional Directors to other senior officers in the administrative Ministry/Department,” the guidelines noted.
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