CCEA approves procedure and mechanism for Strategic Disinvestment

August 16, 2017

The Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister Narendra Modi has approved revision in the procedure and mechanism for strategic disinvestment.
In this regard, the proposal was forwarded by the Department of Investment and public Asset Management (DIPAM). The approval will help in speedy completion of strategic disinvestment transactions.

Revised mechanism for strategic disinvestment

Setting up an Alternative Mechanism (AM): It will decide on the matters relating to terms and conditions of the sale from the stage of inviting of Express of Interests (Eols) till inviting of financial bid. It will consist of the Finance Minister, Minister for Road Transport & Highways and Minister of Administrative Department.
Empowering the Core Group of Secretaries (CGD): It will enable CGD to take policy decisions with regard to procedural issues and consider deviations as necessary from time to time for effective implementation of decisions of CCEA.

Strategic Disinvestment

In Strategic disinvestment, significant proportion of a Public Sector Unit’s (PSU) share and the management control goes to a private sector which is considered as strategic partner. It is different from the ordinary disinvestment in which management of PSU is retained with Government.

Department of Investment and public Asset Management (DIPAM)

DIPAM is the nodal agency of Union Finance Ministry mandated to advise the Union Government in the matters of financial restructuring of PSUs and also for attracting investment through capital markets. It will also deal with all matters relating to sale of Union Government’s equity in PSUs through private placement or offer for sale or any other mode in the erstwhile Central PSUs.

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