Lok Sabha Question No. 194 (STARRED), answered on 2015-12-11
Subject: Disinvestment PSUs
Ministry: FINANCE
Asked by: ADVOCATE NARENDRA KESHAV SAWAIKAR, V. SATHYABAMA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF DISINVESTMENT

## LOK SABHA STARRED QUESTION NO. *194

TO BE ANSWERED ON 11 th  DECEMBER, 2015 AGRAHAYANA 20, 1937 (SAKA)

## Disinvestment in PSUs

## *194 ADV. NARENDRA KESHAV SAWAIKAR: SHRIMATI V. SATHYA BAMA:

Will the Minister of FINANCE be pleased to state:

- (a) the salient features of the present disinvestment policy of the Government;
- (b) Whether  the  Government  has  taken  note  of  reservations  expressed  over disinvestment policy, if so, the response of the Government thereon;
- (c) whether  the  Government  proposes  to  devise  new  guidelines  to  disinvest  loss making Central Public Sector Enterprises (CPSEs)/Public Sector Undertakings (PSUs);
- (d) If so, the details of CPSEs/PSUs/banks disinvested/likely to be disinvested/funds collected during each of the last three years and the current year, CPSE/PSU/Equity-wise; and
- (e) whether the Government proposes to utilise the above funds in new Government  enterprises  and  also  plan  to  infuse  it  as  capital  in  loss  making PSUs, if so, the details thereof and the steps taken thereon?

## ANSWER

## THE MINISTER OF  FINANCE IN THE MINISTRY OF FINANCE (SHRI ARUN JAITLEY)

(a) to (e)  A Statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA STARRED QUESTION NO. 194 TO BE ANSWERED ON 11 TH DECEMBER, 2015 REGARDING ' DISINVESTMENT IN PSUs '

- (a) The current disinvestment policy approved by the Government on 5 th November,  2009  envisages  development  of  people's  ownership  of  Central  Public Sector  Enterprises  (CPSEs)  so  as  to  share  in  their  wealth  and  prosperity,  while ensuring that the Government equity does not fall below 51% and Government retains management control. The salient features of the present disinvestment policy of the Government are as follows:
- (i) Listed    CPSEs  (not  meeting  SEBI's  minimum  mandatory  shareholding  of 10% which now stand revised to 25%) are to be made compliant through sale of shares by Government or by the CPSEs through issue of fresh shares or a combination of both;
- (ii) Unlisted CPSEs with no accumulated losses and having earned net profit in three consecutive preceding years are to be listed.
- (iii) In case of profit making  minority stake sale  (disinvestment upto 49% equity of Central Public Sector Enterprises), management control of Central Public Sector Enterprises (CPSEs) with 51 % will remain with the government;
- (b) The Trade Unions in the past have expressed concern over  disinvestment in CPSEs . In this regard, it has been clarified that disinvestment is being done as per the extant Government policy and SEBI guidelines.
- (c) In the budget speech of 2015-16, it has been stated that disinvestment would include  both  disinvestment  in  loss  making  units,  and  some  strategic  disinvestment. Pursuant to this announcement, inter-ministerial consultations are ongoing.
- (d) The details of the CPSEs/ PSUs disinvestment during the last 3 years and the current year is as follows:

## Financial Year 2012-13

|   S.No. | Name of CPSE                                   | Receipts (in Rs. crore)   |
|---------|------------------------------------------------|---------------------------|
|       1 | National Building Construction Corporation     | 124.97                    |
|       2 | Hindustan Copper Ltd.                          | 807.03                    |
|       3 | NMDC Ltd.                                      | 5,973.27                  |
|       4 | Oil India Ltd.                                 | 3,141.51                  |
|       5 | NTPC Ltd.                                      | 11,457.54                 |
|       6 | Rashtriya Chemicals and Fertilizers Ltd. (RCF) | 310.15                    |
|       7 | National Aluminium Company Ltd. (NALCO)        | 627.84                    |
|       8 | Steel Authority of India Ltd. (SAIL)           | 1,514.50                  |

| Total   | 23,956.81   |
|---------|-------------|

## Financial Year 2013-14

| Sl. No.   | Name of CPSEs                                   | Receipts (in Rs. Crore)   |
|-----------|-------------------------------------------------|---------------------------|
| 1         | Hindustan Copper Ltd.(HCL)                      | 259.56                    |
| 2         | ITDC Ltd.                                       | 30.17                     |
| 3         | MMTCLtd.                                        | 571.71                    |
| 4         | National Fertilizers Ltd. (NFL)                 | 101.08                    |
| 5         | State Trading Corporation Ltd.(STC)             | 4.54                      |
| 6         | Neyveli Lignite Corporation Ltd. (NLC)          | 358.21                    |
| 7         | Engineers India Ltd. (EIL)                      | 497.32                    |
| 8         | Indian Oil Corporation Ltd. (IOCL)              | 5,341.49                  |
| 9         | CPSE-Exchange Traded Fund                       | 3,000                     |
| 10        | National Hydroelectric Power Corporation (NHPC) | 2,131.28                  |
| 11        | Power Grid Corporation of India Ltd. (PGCIL)    | 1,637.32                  |
| 12        | Bharat Heavy Electricals Ltd. (BHEL)            | 1,886.78                  |
|           | Total                                           | 15,819.46                 |

## Financial Year 2014-15

| Sl. No.   | Name of CPSEs        | Receipts (in Rs. Crore)   |
|-----------|----------------------|---------------------------|
| 1         | SAIL                 | 1,719.54                  |
| 2         | Coal India Ltd.(CIL) | 22,557.63                 |
|           | Total                | 24,277.17*                |

## Financial Year 2015-16

| Sl. No.   | Name of CPSEs                                | Receipts (in Rs. Crore)   |
|-----------|----------------------------------------------|---------------------------|
| 1         | Rural Electrification Corporation Ltd. (REC) | 1,608.00                  |
| 2         | Power Finance Corporation Ltd. (PFC)         | 1,671.00                  |
| 3         | Dredging Corporation of India Ltd.(DCIL)     | 53.33                     |
| 4         | Indian Oil Corporation Ltd. (IOC)            | 9,369.00                  |
|           | Total                                        | 12701.33                  |

The Government has also identified some CPSEs for disinvestment during the year in sectors,  which  includes  defence,  fertilizer,  heavy  engineering,  minerals  and  metals, oil,  power,  steel,  technical  consultancy,  tourism,  transport  services,  trading  and marketing.  The  actual  realization  from  disinvestment  of  a  CPSE  depends  on  the prevailing market conditions and extant policy considerations.

(e) In January 2005, the Government decided to constitute a 'National Investment Fund'  (NIF)  into  which  the  realisation  from  sale  of  minority  shareholding  of  the Government in profitable  CPSEs  would  be  channelized.  Presently,  the  receipt  from NIF is used  for the following approved purpose:

- (i) Subscribing to shares being issued by the CPSE including PSBs and Public Sector Insurance Companies, on rights basis so as to ensure 51% ownership of  the  Government  in  those  CPSEs/PSBs/Insurance  Companies,  is  not diluted.
- (ii) Preference allotment of shares of the CPSE to promoters as per SEBI (issue of Capital and Disclosure Requirements) Regulation, 2009 so that Government shareholding does not go down below 51% in all cases where the CPSE is going to raise fresh equity to meet its Capex programme.
- (iii) Recapitalisation of public sector banks and public sector insurance companies.
- (iv) Investment by Government in RRBs/ IIFCL/NBARD/Exim Bank;
- (v) Equity infusion in various metro projects;
- (vi) Investment  in  Bhartiya  Nabhikiya  Vidyut  Nigam  Limited  and  Uraninum Corporation of India Ltd;
- (vii)     Investment in Indian Railways towards capital expenditure.

The NIF fund is maintained in the Public Account and the allocation as per the above purpose is made by Department of Economic Affairs, Ministry of Finance.

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