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60 Economic Survey 2021-22

After 2014, the disinvestment policy was renewed with stake sales in PSEs such as Hindustan
Petroleum Corporation Limited (HPCL), Rural Electrification Corporation Limited (REC),
Dredging Corporation of India Limited (DCIL), Hospital Services Consultancy Corporation
Limited (HSCC), National Projects Construction Corporation Limited (NPCC), THDC India
Limited and North Eastern Electric Power Corporation Limited; and successful listing of
PSEs like IRCTC, HUDCO, Cochin Shipyard Ltd., General Insurance Corporation, New India
Assurance Company Ltd., Mazagon Dock Shipbuilders Ltd. (MDL) and RailTel on the stock
market. In order to realize the mission of New, Self-reliant India, there was a need to redefine
public sector participation in business enterprises and to encourage private sector participation
in all sectors.

Against this backdrop, New Public Sector Enterprise (“PSE”) Policy for Atmanirbhar Bharat was
notified on 4th February 2021. The policy intends to minimize the presence of the Government in
the PSEs across all sectors of the economy. Under the New PSE Policy, public sector commercial
enterprises have been classified as Strategic and Non-Strategic sectors. Following four broad
strategic sectors have been delineated based on the criteria of national security, energy security,
critical infrastructure, provision of financial services and availability of important minerals-
(i) Atomic Energy, Space and Defense; (ii) Transport and Telecommunication; (iii) Power,
Petroleum, Coal and other minerals; and (iv) Banking, Insurance and Financial Services.

The B.E for disinvestment proceeds for the year 2021-22 was fixed at `1,75,000 crore. So far,
Government has received ` 9,330 crores (as on 24 January 2022) from disinvestment of CPSEs
through Offer for Sale (OFS) route and sale of shares through the stock exchange. CPSE stocks
have gained traction among the investors, as reflected in the BSE CPSE index, which has risen by
40.02 per cent since January 2021 to date (24 January 2022), in comparison to the benchmark index,
which rose by 23.33 per cent. Total dividend receipts from CPSEs in 2020-21 stood at ` 39,607
crore, which exceeds the Revised Estimate (RE) of ` 34,717 crore, and is more than actual dividend
receipts (` 35,543 crore) during the previous financial year. Total dividend receipts in the current
financial year (as of 24.01.2022) stand at ` 40,201.47 crore.

Since 2016, the government has given ‘in-principle’ approval for strategic disinvestment of
35 CPSEs and/or Subsidiaries/ Units/ Joint Ventures of CPSEs and IDBI Bank. During the present
year, with progress on privatization of Air India, the government has crossed a significant milestone
with M/s Talace Pvt Ltd, a wholly-owned subsidiary of M/s Tata Sons Pvt Ltd emerging as the
successful bidder for sale of 100 per cent equity shareholding of GoI in Air India along with equity
shareholding of Air India in AIXL and AISATS. Share Purchase Agreement was signed among
M/s Talace Private Ltd, Air India and Ministry of Civil Aviation on 25.10.2021. This progress on
privatization of Air India is particularly important, not only in terms of garnering disinvestment
proceeds but also for boosting the privatisation drive.