The Union Cabinet has permitted a proposal to empower the board of public sector undertakings (PSUs) to recommend strategic divestment, minority stake sale or closure of their subsidiaries and joint ventures.
At current, PSU boards have the authority to make fairness investments, undertake mergers and acquisitions topic to sure ceilings of net-worth. However, powers for disinvestment and closure of their subsidiaries just isn’t out there to PSUs, apart from suggesting minority stake gross sales for some PSUs.
The course of for strategic disinvestment can be open and primarily based on the ideas of aggressive bidding. The pointers for a similar can be laid down by the Department of Investment and Public Asset Management (DIPAM). For closure of PSUs, pointers can be issued by the Department of Public Enterprises (DPE).
The transfer is in keeping with the centre’s Public Sector Enterprises (PSE) coverage, 2021, that seeks to minimise the presence of presidency in each strategic and non-strategic sectors. The powers supplied to PSUs’ boards would grant them better autonomy to take selections and recommend for well timed exit from their funding in subsidiaries or joint ventures. This would additionally assist them in monetising their investments or shut loss-making items, expedite choice making and lower operational and monetary expenditure, the centre mentioned in a press release.