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

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more