Skip to main content

CPSEs Asked to Draw up Plans to Monetise Assets

By
Will also look at strategies to offload stakes in subsidiaries & joint ventures
In a bid to drive investment in the economy and prod state-run firms for capital expansion, the government has asked central public sector enterprises (CPSEs) to work out their plans for monetizing their assets.
A senior government official said that CPSEs will also look at strategies to offload stakes in the subsidiaries and joint ventures as part of this exercise.
According to government data, there are 63 subsidiary companies of CPSEs which are yet to start regular production.
“The administrative ministries are in dialogue with their compa with their compa nies. Already, so me power sector firms including Power Grid Cor poration are wor king to set up an infrastructure investment trust (InvIT) to unlock value of their as sets,“ he said.
An executive with Power Grid Corp confirmed the development and said that the state-run firm will soon appoint consultants to look at monetizing its operational transmission assets.
The above quoted government official said that CPSEs should float new subsidiaries only if they have strategic importance.“If the existing subsidiaries or joint ventures are non-core entities and are not providing better returns than the main unit, companies will do well to offload their stake in them,“ he said.
The move comes at a time when the government is looking to push public spending to boost growth to 8% in this fiscal itself.Last week, ET had reported that chief economic adviser Arvind Subramanian may be given charge to work out how much investment would be required to achieve a GDP growth rate of 8% this year and also how this target can be met.
According to Reserve Bank of India (RBI), bank loans grew 9.2% year-on-year in the fortnight ending April 29, the slowest since December last year.
In his budget speech, finance minister Arun Jaitley had said that there's a need to use the assets of CPSEs for generation of resources for investment in new projects.
“We will encourage CPSEs to divest individual assets like land, manufacturing units, etc., to release their asset value for making investment in new projects,“ he had said, adding that the NITI Aayog will identify the CPSEs for strategic sale.
The government has budgeted . 53,883 crore as dividends from ` CPSEs this fiscal.
Last year, the government had noted that there were huge variations in dividend paid by CPSEs and there was a need for a clear policy on the matter. It had then asked CPSEs to shell out 30% dividend and raised about Rs 44,000 crore including special dividends.
The Economic Times New Delhi,27th May 2016

Comments

Post a Comment

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more