“The government has given in-principle approval for strategic disinvestment of 28 CPSEs including subsidiaries, Units and Joint Ventures with sale of majority stake of Government of India and transfer of management control,”

Central public sector enterprise (CPSE) or public sector undertaking (PSU) is defined as a company in which Central or State Government have a direct holding of more than 51% share.

To gain complete ownership of a PSU, any private person/entity needs to buy 51% shares to become the majority shareholder and gain complete sway over the direction of the PSU and hence the PSU is said to be privatized.

As of 27th August 2019, ONGC’s market capitalization is USD 22 Billion, so to gain complete ownership of it any private person/entity needs to buy 51% shares i.e. needs USD 11.2 billion to become the majority shareholder of ONGC.

PSU disinvestment: This year the union government hopes to earn Rs 1.05 lakh crore from dilution of its stake in the central PSUs.

“The government has given in-principle approval for strategic disinvestment of 28 CPSEs including subsidiaries, Units and Joint Ventures with the sale of majority stake of Government of India and transfer of management control,”

- Anurag Thakur, minister of state for finance, informed the Rajya Sabha

The government has identified 28 central PSUs for disinvestment this year. It also includes big companies like Air India, BPCL, Pawan Hans ltd and 25 more.

. The government has estimated that it will be able to earn Rs 1.05 lakh crore in this fiscal by diluting its stake in these companies.

Here is the list of total 28 central PSU’s identified by the government of India for disinvestment-

* Project & Development India Ltd.
* Hindustan Prefab Limited (HPL).
* Hospital Services Consultancy Ltd. (HSCC)
* National Project construction corporation (NPCC)
* Engineering Project (India) Ltd.
* Bridge and Roof Co. India Ltd.
* Pawan Hans Ltd.
* Hindustan Newsprint Ltd(subsidiary)
* Scooters India Limited
* Bharat Pumps & Compressors Ltd
* Hindustan Fluorocarbon Ltd. (HFL) (sub.)
* Central Electronics Ltd
* Bharat Earth Movers Ltd. (BEML)
* Ferro Scrap Nigam Ltd.(sub.)
* Cement Corporation of India Ltd (CCI)
* Nagarnar Steel Plant of NMDC
* Alloy Steel Plant, Durgapur of SAIL
* Salem Steel Plant of SAIL
* Bhadrawati units of SAIL
* Air India and its five subsidiaries and one JV.
* Dredging Corporation of India
* HLL Life Care
* Indian Medicine & Pharmaceuticals Corporation Ltd. (IMPCL)
* Karnataka Antibiotics
* Kamrajar Port
* Indian Tourism Development Corporation (ITDC)
* Rural Electrification Corporation Limited (REC)
* Hindustan Petroleum Corporation Limited



In order to run the country, the government will incur some expenses, like to pay salaries, clear loans taken from foreign banks, welfare activities, infrastructure works, defence etc.

in order to pay for these expenses, the government must have some source of income. Usually, the government raises its capital for its expenses through taxes, duties, etc. or where the gap between the earnings and expenses is too much they may borrow from outside. But, now in India, the government has enormous assets in the form of PSUs that are partly or fully owned by the government. Since these PSUs are not performing at expected levels, the government is unable to make money by running them, so, if the government starts to sell small portions of these PSUs to private entities, the government can raise capital to meet its expenses and since the PSUs will be partly run by private parties, more professionalism can be infused in the management of them, thereby making them more profitable.

The disinvestment helps govt to minimise its fiscal deficit. It also helps in restructuring or rejuvenating PSUs through the participation of private players. The disinvestment may also help in regularising the salaries of workers.

High performing PSU’s like the oil, power and coal sector are in good profit and should not be privatized but loss-making sectors like BSNL, MTNL, Air India, western coalfields ltd., Rashtriya Ispat Nigam ltd. and many other closed PSUs may be auctioned and get a fair price if sold. The condition is so bad that they are not able to pay the salaries of the employees. .It will take some time to privatize them and subject merit and demerit.



Dena Bank and Vijaya bank got merged with Bank of Baroda. Dena bank had such a massive NPA that it compelled gov. of India to merged it with a bigger entity. Bank of Baroda was chosen as it’s a bank with much bigger assets and more than a century of experience in banking .\

HEMANG BARUA