The Department of Public Enterprise (DPE) has been brought under the Finance Ministry to speed up the privatization process and exercise greater financial control over state-run enterprises. It has earlier been part of the Ministry of Heavy Industries.
The Cabinet Secretariat, on Tuesday, amended the allocation of business rules and moved the DPE under the direct control of the Finance Minister Nirmala Sitharaman. DPE’s present functions include review of capital projects and expenditure in Central Public Sector Enterprises (CPSE) and measures aimed at improving their performance and capacity building, among others. The inclusion of DPE would result into better coordination on issues like disinvestment.
An official said the purpose is to improve efficiency of CPSEs, effective monetization of their resources that are lying idle and nudge them to promote Atmanirbhar Bharat by procuring goods and services from within the country, particularly from MSMEs. “CPSEs have idle or underutilized assets. For example, 156 of them have over 4,000 acres of prime land in various parts of the country, which could be made productive assets. Besides, the change will also facilitate the government’s disinvestment programme.”
Nilaya Varma, Co-Founder and CEO of Primus Partners, told HT that the transfer of DPE to the finance ministry is a strong indication of the government’s push towards disinvestments. “The fiscal stress brought on by the pandemic has exacerbated the need for privatization of public enterprises and monetization of underutilized assets,” Varma said. “This move would also allow effective enablement of PSEs to align with the vision of boosting the domestic ecosystem by encouraging procurement through Indian MSMEs.”
This comes ahead of the significant privatization track being taken up by the Centre, including the sale of Bharat Petroleum Corporation Ltd (BPCL), Shipping Corporation, Container Corporation, Neelachal Ispat Nigam Ltd, Pawan Hans, Air India – which are expected to be completed in 2021-22.
Moreover, the government has decided to launch an initial public offering (IPO) of Life Insurance Corporation of India (LIC) and residual stake sale in IDBI Bank during the financial year beginning April. There are also talks about privatization of two public sector banks and an insurance company.