The Indian Government has stepped in to explicitly bar Central Public Sector Enterprises (CPSEs), State Governments and co-operatives from bidding for other CPSEs when they are put up for sale.
The move is intended to ensure that the Government’s policy of privatising most CPSEs, while keeping only a few under its ownership in strategic sectors, is not thwarted by CPSEs buying one another.
In a statement, The Department of Investment and Public Asset Management said Public Service bureaucracy had rendered the CPSEs commercially risk-averse.
“As a result, useful productive assets remain locked in them, resulting in sub-optimal realisation of valuable economic opportunities,” the Department said.
The sources said the Government’s clarity on the issue was important as hundreds of CPSEs were expected to be privatised in the coming years.
The Government previously released a policy on the matter, stating it would retain an interest in CPSEs in the atomic energy; space and defence; transport and telecommunications; power; petroleum; coal and other minerals; banking; and insurance and financial services sectors.
It seeks a complete exit from non-strategic sectors such as textiles, pharmaceuticals and metals, among others.
It is understood that the Government has already realised a record Rs1 trillion ($A2 billion) by selling its stake in various CPSEs which range from 51 per cent ownership to total control.
New Delhi, 26 April 2022
