Union Cabinet approves privatisation of PSUs

The Union Cabinet has approved the much-awaited policy on the privatisation of public sector undertakings (PSUs). The policy, which will lay out a road map for the presence of government-owned entities in strategic and non-strategic sectors, was taken up at the Cabinet meeting held recently and was approved, said two government officials in the know.

The policy was part of the Aatmanirbhar Bharat package announced by finance minister Nirmala Sitharaman in May 2020 as a coherent policy where all sectors would be opened for private sector participation. The government had then announced its intention to limit the presence of PSUs to one to four in strategic sectors and to privatise, merge or bring the remaining companies under a holding company.

Companies in non-strategic sectors would see the government exiting completely. The timing of privatisation of companies in non-strategic sectors is likely to be decided on a case-by-case basis.

Detailed consultations within the government departments and ministries took place which led to the delay in getting the privatisation policy approved, an official shared.

Many discussions were held between a group of ministries that have carved and shaped the policy, it is understood.

According to the initial draft of the policy floated by the Department of Investment and Public Asset Management, around 18 sectors were classified as strategic sector that included power, fertilisers, telecom, defence, banking and insurance.