Context: The Union Cabinet approved sale of the government’s stake in blue-chip oil firm Bharat Petroleum Corporation Limited (BPCL), Shipping Corporation of India (SCI) and onland cargo mover Container Corporation of India (Concor), as well as decided to cut shareholding in select public sector firms below 51%.
- The Cabinet Committee on Economic Affairs (CCEA) approved sale of the government’s entire 53.29% stake, along with the transfer of management control in the country’s second-biggest state-owned refiner BPCL, after removing the Numaligarh refinery in Assam from its fold,
- In a parallel move, the Cabinet has approved reducing the government’s stake in select PSUs, such as Indian Oil Corporation (IOC), to below 51% while continuing to retain management control.
REASONS BEHIND THE DISINVESTMENT PLAN
- To boost revenue collections that has been hit by slowing economy.
- The resources unlocked by the strategic disinvestment of these CPSEs would be used to finance the social sector/developmental programmes of the Government benefiting the public
- The unlocked resources would form part of the budget and the usage would come to scrutiny of the public.
- It is expected that the strategic buyer/acquirer may bring in new management/technology/investment for the growth of these companies and may use innovative methods for their development.”
- The government has set a disinvestment target of 1.05 lakh crore for the current financial year.