Cabinet approves procedure, mechanism for CPSEs' strategic disinvestment

To accelerate strategic disinvestment in central public sector enterprises (CPSEs), the Cabinet Committee on Economic Affairs (CCEA) on Thursday allowed a panel headed by Finance Minister Arun Jaitley to decide both the pricing and mode of sale of government equity in these entities.

The government approved an alternative mechanism under Jaitley in 2017 to give a leg- up to the strategic disinvestment programme. But this initiative had, so far, failed to deliver with cases of strategic disinvestment facing investor disinterest and getting delayed over procedural issues.

As per the CCEA decision, the alternative mechanism has now been delegated powers to decide quantum of shares to be transacted, the mode of sale and final pricing on any strategic disinvestment case where CCEA has given its 'in principle' approval, an official statement said.

The mechanism will also lay down the principles and guidelines for such pricing and also select the strategic partner finalizing the terms and conditions of sale. It will also decide on the proposals of Core Group of Secretaries on Disinvestment (CGD) with regard the timing, price, the terms and conditions of sale and any other related issue to the transaction.

"This will facilitate quick decision-making and obviate the need for multiple instances of approval by the CCEA for the same CPSE," the statement said.

The government had fixed Rs 80,000 crore as disinvestment target for FY19. As on February 28, it has realised Rs 56,473.32 crore.