18 May, 2022 08:25 PM

60 central public sector enterprises identified for privatization or closure

60 central public sector enterprises identified for privatization or closure

As the government begins to implement the new public sector enterprises (PSE) policy in the 'non-strategic sectors,' as many as 60 central public sector enterprises (CPSEs) under the ministries of fertiliser, textiles, chemicals and petrochemicals, pharmaceuticals, and commerce are likely to be on the initial list of firms for privatisation or closure.

According to sources, there are about 175 CPSEs in the non-strategic sector, one-third of which will be closed and the rest will be privatised, with only a few not-for-profit companies remaining in the public sector. According to the PSE policy, a group of officers from Niti Aayog, the Department of Public Enterprises, and administrative ministries are identifying the companies that will be privatised or closed.

According to an official source, all nine CPSEs under the fertiliser ministry, including Madras Fertilizers and National Fertilizers, are likely to be privatised over time. Given the country's massive fertiliser imports, the government has been attempting to scale up domestic manufacturing in recent years, and these businesses could be attractive to the private sector because of the captive market for the products.

The ailing National Textile Corporation (NTC), which has 23 mills with obsolete technology, is one of the CPSEs under the textiles ministry that the Centre is likely to close. "Finding a buyer for NTC will be difficult because its machinery is old and based on outdated technology." However, its land has monetary value, according to another official.

Two commerce ministry trading companies will be shut down because their businesses have become unviable over time.

Cotton Corporation of India (CCI) and Jute Corporation of India (JCI) will remain in the government sector as public good companies established for the benefit of farmers. Under the minimum support price (MSP) mechanism, CCI purchases cotton and JCI jute from farmers through price support operations.

The strategic sector policy was unveiled in the FY22 Budget, which stipulates that the government maintain a minimal presence in the four broad sectors while the remaining ones can be privatised, merged, or closed. Atomic energy, space, and defence are among these sectors, as are transportation and telecommunications, power, petroleum, coal, and other minerals, and banking, insurance, and financial services. All CPSEs in the non-strategic sector will be privatised or closed if privatisation is not feasible.

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