More than 60 central public sector enterprises (CPSEs) under the Ministry of Fertilizers, Textiles, Chemicals and Petrochemicals, may be featured in the initial list of companies to privatize or close, as the government begins implementing new public sector. Enterprise (PSE) Policy in ‘Non-Strategic Sector’.
There are about 175 CPSEs in the non-strategic sector, one-third of which will eventually close, and the rest, operating units will be privatized and a handful of nonprofits will be retained in the public sector, sources told FE. A team of officials from the Policy Commission, Public Enterprises Department and the Administrative Ministry are identifying the companies that will be privatized or closed down in accordance with the PSE policy.
Nine CPSEs under the Ministry of Fertilizers, including Madras Fertilizers and National Fertilizers, are likely to be privatized year after year, an official source said. Given the country’s massive fertilizer imports, the government has been trying to increase domestic production in recent years and these companies could be attractive to the private sector due to the captive market for the products.
Among the CPSEs under the Ministry of Textiles, the center is likely to go for the closure of the ailing National Textile Corporation (NTC), which has 23 mills with obsolete technology. “It will be difficult for NTC to find buyers based on old and outdated technology. However, it does have land value that can be monetized, “said another official.
Two trading companies under the Ministry of Commerce will be shut down because their business has been in shambles for years.
Cotton Corporation of India (CCI) and Jute Corporation of India (JCI) will be retained in the public sector as they are public good companies established for the welfare of farmers. CCI collects cotton and JCI jute from farmers through price support activities under the Minimum Support Price (MSP) process.
The FY22 budget unveiled strategic sector policy that has a minimal government presence in four broad sectors where the remainder can be privatized or consolidated or closed. These sectors are nuclear power, space and defense; Transport and telecommunications; Energy, petroleum, coal and other minerals; Banking, insurance and financial services. In the non-strategic sector, all CPSEs will be privatized or shut down if privatization is not possible.