Disinvestment Commission

 

• Ministry of Industry (Department of Public Enterprises) vide a resolution dated 23^rd August 1996, constituted a Public Sector Disinvestment Commission for a period of three years under Shri G.V. Ramakrishna along with four other Members.  The term was further extended till 30^th November 1999.

 

• The Commission submitted reports on 58 PSEs.

 

• The Commission was reconstituted vide Ministry of Disinvestment resolution No.11012/1/2000-Adm dated 24^th July 2001 for a period of two years under Dr. R.H. Patil as Chairman alongwith four other Members. The term of the Commission was subsequently extended till October 2004.

 

• MODI had communicated to the Commission on 23^rd January 2002 that all non-strategic PSEs including subsidiaries but excluding IOC, ONGC and GAIL stand referred to the Commission for it to prioritise, examine and make recommendations in the light of the existing Government policies as articulated on 16^th March 1999 and the Budget Speeches of Finance Minister from time to time.  

 

• The reconstituted Commission submitted Reports on 41 PSUs, out of which 4 PSUs (NCL, MOIL, RITES and PEC) were review cases of the recommendations of the earlier Commission. 

 

• In this manner there are 24 Reports covering 95 cases which were studied by the first and second Commission.  Break up of the action taken in these cases is as follows.

 

o       In 20 cases the Commission itself did not recommend Strategic Sale.

o       In 6 cases the Commission had recommended an Offer for Sale of minority shares.  Out of these an Offer for Sale of MTNL shares was concluded in December 1997 while in the case of NALCO the disinvestment proposal was not pursued after July 2003.

o       In 12 cases the Government decided not to pursue Strategic Sale / disinvestment out of which in 3 cases the reason was that Bidders were not found for these companies.

o       In 11 cases Strategic Sale has been implemented out of which in 2 cases privatisation has been partly implemented (19 Hotels of ITDC and 3 Hotels of HCI have been privatised).

 

• Subsequent to the formation of the UPA Government, all the Members and the Chairman of the Disinvestment Commission resigned in May 2004 and the Commission was wound up in end October 2004.

 

o       The remaining 46 cases, which were studied by the Disinvestment Commission would be referred to Board for Reconstruction of Public Sector Enterprises (BRPSE) in the case of loss making or sick PSEs for consideration of their revival / reconstruction.  Under the NCMP guidelines, profit making PSEs are generally not to be disinvested.  Hence, BRPSE would consider strengthening such PSUs alongwith making them commercially autonomous.