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Govt to snip red-tape in PSU sale approval, cut time frame by 90%

The concept is to put off the necessity for the approval of the Core Group of Secretaries on Divestment for privatisation of corporations, particularly in non-strategic sectors.

The NITI Aayog and the Department of Investment and Public Asset Management (Dipam) are exploring a proposal to cut back the time frame for the disinvestment course of to a number of months, from 12-13 months now.

This consists of lowering the time concerned in a number of steps, corresponding to appointing advisers and intimating shortlisted bidders.

 

The proposal, in accordance to two authorities officers, is to overhaul the privatisation course of which can embrace instantly in search of the Cabinet Committee on Economic Affairs’ (CCEA’s) approval after the suppose tank submits its suggestions on candidates for privatisation.

“We are deliberating to reduce the time frame of the process by 90 per cent,” mentioned one of many official privy to the plan.

Explaining the proposal, one other official mentioned the thought is to put off the necessity for the approval of the Core Group of Secretaries on Divestment (CGD) for privatisation of corporations, particularly in non-strategic sectors.

Consultation and approval by the CGD take time, main to delays, the official mentioned.

It’s being mentioned if approval from the CGD will be bypassed, he added.

Currently, the NITI Aayog identifies corporations for divestment that are then thought-about by the cupboard secretary-led CGD.

The CGD offers its recommendations to Alternative Mechanism (AM), which contains the finance minister, the minister for administrative reforms, and the minister for roads, transport and highways.

Once permitted by AM, Dipam strikes the proposal to receive in-principle approval from the CCEA for strategic divestment of a PSU.

At current, strategic divestment includes round 12 steps, together with identification of CPSEs for privatisation, approval of shareholding to be divested by the CCEA, number of intermediaries, floating preliminary info memorandum, approval of bids by the CCEA, and completion of the transaction by execution of the share buy settlement, moreover adhering to Sebi pointers in case of listed corporations.

The NITI Aayog and Dipam are additionally contemplating sector-wise approval for privatisation, as an alternative of getting clearance for particular person PSUs.

As there’s readability on sustaining a restricted presence in strategic sectors and exiting from non-strategic sectors utterly, in search of approval for privatisation of particular person PSUs should be carried out away with, mentioned one of many officers quoted above.

Once finalised, a Cabinet word detailing the modifications will likely be moved, he added.

Dipam has additionally approached the NITI Aayog to assist them “sequencing” the PSUs that may be privatised or merged, and closed in each non-strategic and strategic sectors.

This consists of deciding on PSUs for privatisation or closure based mostly on sectoral evaluation, and their timing.

Strategic sectors embrace atomic vitality, area and defence, transport and telecommunications, energy, petroleum, coal and different minerals, and banking, insurance coverage and monetary providers the place the federal government intends to maintain a “bare minimum” presence.

In non-strategic sectors corresponding to hospitality and metal, amongst others, public sector enterprises will likely be both privatised or closed.

The authorities can also be discussing trimming the present pointers for the closure of PSUs.

Shutting down PSUs takes important time as a result of the rules of the Department of Public Enterprises want to be adhered to, the primary official mentioned.

There’s a variety of scope to rationalise these pointers, he added.

The course of for closure of PSUs is exhaustive, and takes over 13 months after the CCEA offers its approval.

This interval consists of steps, corresponding to preparatory work wanted for estimation of statutory and worker dues, liabilities in the direction of secured collectors, disposal of movable belongings, and utilisation of PSU land for constructing public infrastructure.

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