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Union Cabinet approves new policy for disinvestment

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The Union Cabinet headed by Prime Minister Narendra Modi approved the new policy for a new process of strategic disinvestment with a view to expedite privatisation of selected Public Sector Undertakings (PSUs). Disinvestment is the action of an organization or government selling or liquidating an asset or subsidiary.Union Cabinet approves the new policy for disinvestment

Key Points:

  • Objective: To streamline and speed up the process and reduce the role of administrative ministries.
  • Nodal department: The Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance was made the nodal department for the strategic stake sale.
  • Inter-ministerial group on disinvestment: DIPAM secretary Mr Anil Khachi will co-chair the inter-ministerial group on disinvestment, along with the secretary of administrative ministries concerned.
  • DIPAM and NITI Aayog (National Institution for Transforming India) will jointly identify PSUs for strategic disinvestment. Earlier, only NITI Aayog used to identify PSUs.
  • Data centres will be set up for bidders to look for information on the PSUs up for sale.
  • Disinvestment proceeds: The government has set a target of mobilising Rs 1.05 lakh crore from disinvestment proceeds. It will help the government to achieve the target of keeping fiscal deficit at 3.3% of the GDP (Gross Domestic Product) in the current fiscal year ending March 31, 2020.
  • Background:  Group of secretaries have agreed to sell the government’s entire 53.29% stake in Bharat Petroleum Corp Ltd, 63.75% stake in Shipping Corporation of India (SCI), 30% in Concor, 100% in North Eastern Electric Power Corporation Limited (NEEPCO) and 75% in THDC (Formerly Tehri Hydro Development Corporation Limited).

About Ministry of Finance:
Founded: 29 October 1946
Minister In-Charge: Nirmala Sitharaman