policy

New Disinvestment Policy – Indian Economy – Free PDF Download

 

A TIMELINE


DIPAM

  1. The intent of the new policy is not to downsize the public sector but to alter it so that assets, including land and cash balances of PSUs, can be hived off and utilized for investment in new projects.
  2. The renaming of the Department of Disinvestment as the “Department of Investment and Public Asset Management” (DIPAM) is a reflection of the new thinking.
  3. The current government is pursuing disinvestment, not to vacate the public sector, but to enhance its efficiency.
  4. The new disinvestment mantra is to
  • i) Minimize interference
  • ii) Allow public sector undertakings to function along with commercial principles
  • iii) Grant managerial autonomy in decision-making, such as in appointments.
  • highlights the distinction between privatization and disinvestment.
  • It provides for land to be valued at market price for inclusion in sales. This will help prevent any scope for rent-seeking and reduces discretionary powers and thus enables bureaucrats to do away with the status quo.
  • NITI Aayoghas been entrusted to come up with new recommendations about loss-making units that can be sold, their assets valued and disposed of, and to carry out possible strategic sales.
  • Financial parameters of public sector companies, such as borrowings and operating profits, are being closely monitored to identify possibilities of share buybacks, a new kind of disinvestment the government has recently come up with.

 

 

 

Indian Economy | Free PDF