The government approved an ambitious plan to sell loss-making state-owned companies, subsidiaries and select manufacturing plants to strategic buyers. The move is setting the ground for privatization of companies after more than a decade.
The cabinet committee on economic affairs (CCEA) has allowed for strategic sales through a two-stage auction process, which will involve submitting technical and financial bids.
In principle, the Cabinet has approved the recommendations with regard to some of the units. Specific cases would now come up after detailed examination,” said Finance Minister Arun Jaitley said.
The companies approved for strategic sale or privatization includes Scooters India, Pawan Hans, Hindustan Newsprint and units of Cement Corporation of India.
A decision to sell four steel plants of NMDC and Steel Authority of India and merge three state-owned companies with their public sector counterparts was also taken.
The government will also sell a 26% stake in Bharat Earth Movers Ltd to a strategic bidder, reducing its stake in the company from 54% to 28 %. The strategic sale plan had been prepared by Niti Aayog.
The NDA government in its previous term had followed a privatization strategy and sold off companies such as Maruti, VSNL, Balco and Hindustan Zinc. But the UPA government, under pressure from the Left parties, had abandoned the programme in 2004.