Divestment not on the basis of profit or loss: Government

Amid questions raised over stake sale in profit-making PSUs, the government on Tuesday said in Rajya Sabha that the criteria for disinvestment were not profit or loss. In oral reply to a question from Shiv Sena MP Sanjay Raut, Minister of State for Finance, Anurag Thakur said that the criteria for disinvestment have been fixed by Niti Aayog and it is not on the basis of profit or loss.

The Minister said that the criteria have been decided on the basis of national security, sovereign functions, market imperfections and public purpose.

"The government follows the policy of disinvestment, strategic disinvestment of CPSEs, which are not in priority sector," Thakur said in the Upper House.

The Modi government has given in-principle approval for disinvestment of about 28 central public sector enterprises (CPSEs) which include profit-making companies like fuel refiner and retailer BPCL and Container Corporation of India Ltd (CONCOR).

As per the disinvestment plan, the government has decided to sell majority stake along with management control in various companies.

Going whole hog on disinvestment, the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi last month approved sale of government`s 53.29 per cent stake in BPCL.

Strategic disinvestment of Shipping Corporation of India Ltd along with transfer of management control to a strategic buyer was also cleared with the CCEA approving stake sale of 63.75 per cent in the company.

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Besides, employees unions of sale-bound CPSEs, some of the opposition leaders have expressed reservations over mega disinvestment exercise especially those of profit-making companies.

The government has defended the move saying disinvestment would unlock resources of the CPSEs which would be used to finance the social sector and developmental programmes benefiting the public. Further, the unlocked resources would form part of the budget and the usage would come to scrutiny of the public.