Are We Seeing The Beginning Of A Disinvestment Drive By The Modi Government?

An innocuous announcement on the government’s Press Information Bureau (PIB) website probably points to the start of Prime Minister Narendra Modi government's disinvestment drive.

The press release points to a set of guidelines issued earlier on how to go about the closure of Central Public Sector Enterprises (CPSEs). According to the guidelines, the government classifies strategic and non-strategic entities and prescribes revival measures. However, there are certain CPSEs in the non-strategic sector that have no scope for revival and are to be closed in a time-bound manner.

The guidelines also prescribe the modalities for the disposal of movable and immovable assets. As for employees working in these CPSEs, the government says it will give workers voluntary retirement schemes at the 2007 notional pay scales.

This press release highlighting closure guidelines comes on the same day that the union cabinet approved the closure of Hindustan Cables Limited (Kolkata) and Central Inland Water Transport Corp Ltd, both CPSEs. The cabinet also gave its "in principle" approval for strategic disinvestment of Bharat Pumps and Compressors Limited, Allahabad, but before that, the government would lend Rs 111.59 crore. This money would presumably be used to clear off old employee and vendor dues before the divestment.