oppn parties Welcome Change Of Stance In Disinvestment

News Snippets

  • For the first time ever, Mukesh Ambani buys a 29% stake in Gautam Adani's Mahan Energen, a subsidiary of Adani Power to source 500MW of electricity from the company's power plant in MP
  • Stocks continue to rise on Thursday - Sensex gains 639 points to 73635 and Nifty 203 points to 22326
  • Golf - Indian Open: 3 Indians at tied 14th as Joost Luiten takes the lead with a wonderful 7-under 65
  • IPL: RR beat DC by 12 runs as Riyan Parag (84 off just 45 balls) shines
  • SP drops two candidates owing allegiance to Azam Khan from Rampur and Moradabad
  • In Assam, a controversy erupted after a picture of UPPL leader Benjamin Basumatary, lying on a stack of Rs 500 notes circulated on social media. UPPL is an ally of the BJP
  • AAP's Jalandhar-West MP Sushil Kumar Rinku joins the BJP. He was the only AAP Lok Sabha MP
  • Supreme Court dismisses Centre's plea to review its 2023 verdict in the PMLA case
  • Close save for passengers as they remain unhurt after the wings of two planes graze at Kolkata airport. Pilots derostered and inquiry ordered by DGCA
  • Bengal BJP leader Dilip Ghosh gets notice from the EC as well as the BJP for making ugly remarks about Mamata Banerjee's parentage
  • Sadanand Vasanth Date, who faught terrorists in the 26/11 attack and was awarded the Preisent's Police medal, has been appointed the head of the NIA
  • Centre will borrow Rs 7.5L cr in the first six months of FY25, nearly 50% of the target for the full year
  • 25 stocks, including SBI, will see same day trade settlements from today in the world's fastest settlement mode in both BSE and NSE
  • Stocks recover smartly on Wednesday: Sensex rises 526 points to 72996 and Nifty 118 points to 22123
  • Tennis: Rohan Bopanna-Matthew Ebden reached the semifinals of the Miami Open
Delhi Lt Governor Vinai Kumar Saxena says government cannot be run from jail, hints at President's Rule in the capital ////// In a dangerous incident, the wings of two planes grazed while taxiing on the runway at Kolkata airport, all passengers were safe but DGCA ordered an inquiry and the pilots were derostered
oppn parties
Welcome Change Of Stance In Disinvestment

By A Special Correspondent
First publised on 2022-04-22 07:11:47

The government has finally woken up to the defect in the disinvestment policy. It has now, through a circular, barred PSUs from bidding for or investing in other companies owned by the central or state governments. When it had got ONGC to but majority stake in HPCL to boost disinvestment receipts in January 2018, the deal was criticized sharply by Comptroller and Auditor General of India (CAG) which said that "such disinvestment only resulted in transfer of resources already with public sector to government and did not lead to any change in stake of public sector/government in disinvested PSUs."

This is absolutely correct. The major idea behind disinvestment is two-fold - to relinquish government ownership and to unlock the value. If one PSU buys another PSU both these objectives are not met for the ownership remains with the government and the value that is unlocked on paper just results in transfer of funds from one cash-rich government company to the government. It may be good to shore up disinvestment receipts but makes no business or political sense. 

The government has belatedly realized its folly. The circular says that "transfer of management control from government of India to any other government organization/ state government may continue the inherent inefficiencies of the PSEs and this will defeat very purpose of the New PSE Policy". Meeting disinvestment targets is of importance but using backhand routes to achieve that is not good. One hopes that with this change of stance, the government will work in real earnest to get out of business and unlock value in PSUs by fast-tracking disinvestment in PSUs that have already been selected for the purpose and identify other PSUs that can be put on the block.