Strategic Disinvestment of BPCL and 4 other PSUs

The Cabinet of PM Narendra Modi approved disinvestment of BPCL along with Shipping Corporation of India (SCI), Container Corporation of India (CONCOR), Tehri Hydro Development Corporation India Limited (THDCIL) and North Eastern Electric Power Corporation Limited (NEEPCO). The GoI has agreed to sell its stakes in the above PSUs

Highlights

The GoI plans to sell 53.3% of its stake of BPCL, 63.8% of SCI and 30.8% of CONCOR to strategic buyers. 74.2% of its stake with THDCIL and 100% of NEEPCO is to be sold to NTPC.

In the disinvestment process the Numaligarh Refinery Limited operating under BPCL is excluded.

Disinvestment plan

The Government had set a disinvestment target of 1.05 lakh crore rupees for the financial year 2019-20. So far, it has collected 17,364 crores as on November 18, 2019. The plan was announced in the Budget session of 2019.

Significance

Disinvestments are done to reduce the financial burdens on government due to inefficient PSUs. It helps to improve public finances. It also introduces market disciplines and competition that will help in depoliticizing non-essential services.

Month: Current Affairs - November, 2019