Disinvestment Dept renamed; PSUs to monetise idle assets
Reflecting a new approach on PSUs, government on Monday said it will encourage them to monetise idle assets for funding investments, while renaming the Department of Disinvestment as the Department of Investment and Public Asset Management (DIPAM).
Presenting the Budget for 2016-17, Finance Minister Arun Jaitley also said that NITI Aayog will identify state-owned companies that would be eligible for strategic sale. He said the government will leverage the assets of CPSEs for generation of resources for investment in new projects. "Change in the name of the department clearly underlines the new approach of the government. It is committed to efficient management and leveraging its investment in the CPSEs for expansion of economic activities as well as attracting fresh investments," Disinvestment Secretary Neeraj Gupta said.
He further said that the government will adopt a comprehensive investment management strategy, not limited merely to disinvestments in equity to augment resources. "It will require policy synergy in various inter-linked issues, such as leverage ratio, capital restructuring, financial restructuring for revival, CAPEX, dividend, bonus share, resource augmentation through disinvestment of equity and assets etc," Gupta said. In his Budget speech, Jaitley said: "We will encourage CPSEs to divest individual assets like land, manufacturing unit to release their asset value for making investments in new projects.
"We will adopt a comprehensive approach for efficient management of the government investment in CPSEs by addressing issued such as capital restructuring, dividend, bonus shares." The government will soon come out with a comprehensive policy for strategic stake sale that will detail the mode as well as valuation methodology for outright sale of even profit making companies. The government aims to collect Rs 56,500 crore through disinvestment in PSUs in the next fiscal, 2016-17.
Of the total budgeted proceeds, Rs 36,000 crore is estimated to come from minority stake sale in PSUs, and the remaining Rs 20,500 crore is projected to come from strategic sale in both profit and loss-making companies.
As regards the current year, the government has been able to meet less than half the budget estimates at Rs 25,312 crore as against the target of Rs 69,500 crore.