The Union Cabinet on Wednesday empowered the boards of the Central Public Sector Enterprises (CPSEs) to privatise, disinvest or close their subsidiaries and sell stakes in joint ventures. The move will give a fillip to the government’s efforts to unlock capital, which are either stuck or sub-optimally employed in state assets, and put these into more productive use.
The move is also expected to reduce the burden on Dipam, which could now focus on privatisation of holding companies or parent CPSEs.
Many large profit-making CPSEs like Coal India, ONGC and NTPC have valuable subsidiaries or JV partnerships (see chart). The Cabinet decision will enable them to monetise parts of these assets without having to secure the approval of the Cabinet or go through the process involving the administrative ministries and/or the department of investment and public asset management (Dipam).