Disinvestment dept awaits policy on strategic sale

1. Disinvestment dept awaits
policy on strategic sale
Says Rs 28.5K-Cr Target Appears Too Steep For This Fiscal

2. Contd…
The disinvestment department has asked the government to frame a policy
for strategic sale as it struggles to meet the steep Rs 69,500-crore target.
Sources say strategic sales, a successful experiment during the Atal Bihari
Vajpayee regime, are unlikely to take off this year but may power asset sales
in 2017 once the overall policy is finalized. Strategic sale refers to transfer of
management control and ownership.
“The department cannot take a call. The government will have to finalize the
policy . Who decides on the companies, the sectors?“ said an official. It has
also written to the government, seeking clarity on whether there is a need
for setting up a new entity like the Disinvestment Commission to identify
companies for strategic sales. “It is unlikely that we would be able to do
strategic sales this year but once the policy is finalized it would definitely
help in the subsequent years,“ said the official, adding that there has to be a
clear policy on every aspect of strategic sales including valuation.

3. Contd…
Officials said they want to ensure that every aspect of the policy is spelt
out to ensure that civil servants are not hauled up years after their
retirement over valuation issues as has be en seen in some of the
strategic sales, which were undertaken during the Vajpayee regime.
For now it seems, that the government is unlikely to meet the target of
raising Rs 28,500 crore from strategic sales that it had estimated in the
2015-16 Budget. This is likely to upset its estimate of raising Rs 69,500
crore from asset sales in the current fiscal.

4. Contd…
The government's disinvestment plan for this financial year has been
upset by the turbulence in the stock market and experts say it looks
difficult to achieve any significant sale in the remaining few months of
the fiscal year. While it may put some pressure on the government, the
record low crude oil prices will provide a cushion in terms of lower oil
subsidy and help the government notch up some savings.
The Vajpayee government successful sold strategic stakes in several
companies. Modern Foods was the first strategic sale in 1999 when it
was sold to Hindustan Lever for a little over Rs 105 crore. Between
2001 and 2002, the government sold stakes in several state-run hotels,
CMC, Hindustan Teleprinters, VSNL, IBP and others.

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