PM Modi identifies ailing PSUs for sale

In what could be a major decision towards shoring up government coffers, the Narendra Modi dispensation is learnt to have identified a slew of sick public sector undertakings (PSUs) which could be put up for strategic sales. Highly-placed sources have indicated that the government is eyeing sizeable profits by selling off these shut units to private entities, as these have huge land banks whose value is worth crores of rupees.

The move is coming at a time when the government has struggled to meet its disinvestment target of the just concluded fiscal (2015-16), which is a major exercise in generating funds.

And amid rising concerns about the not so satisfactory revenue generation through disinvestment in 2015, the aforementioned step seems to be a last ditch effort to get some much needed funds.

The government’s think-tank Niti Aayog has been asked by the Prime Minister’s Office to identify all the shut PSUs for the purpose, and according to sources privy to the development, the work is at an advanced stage and is likely to be completed soon.

Significantly, Niti Aayog has also been asked by the PMO to identify PSUs in which the government’s stake sale can be conducted to achieve the disinvestment target for the year 2016-17, which is Rs 56,500 crore, sources further informed. The task of peparing a list of state-owned entities where the government plans to sell its stake during the current fiscal, is to start soon, sources informed.

However, at the same time, the Centre may face problems in strategic sale of sick PSUs as several factors like workers’ union issues, payment delays and the overall resistance by workforce of such units could be an obstacle in its path.

On stake sale of state-owned entities, consent of line ministries for doing so would be required, and this itself sometimes consumes a lot of time.

The government plans to raise Rs 56,500 crore by selling stakes in state-owned enterprises in 2016-17, out of which Rs 36,000 crore are to come from minority stake sales and Rs 20,500 crore from strategic stake sales.

This target is in fact 19 per cent lower than the Rs 69,500 crore which the government had fixed in 2015-16 for disinvestment. That too had to be scaled down later as the government struggled to sell its stake in many blue-chip entities.