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NITI Aayog and Strategic Disinvestment

  May 29, 2020

NITI Aayog and Strategic Disinvestment

Eleven public sector units/enterprises/undertakings are shortlisted by the Niti Aayog for strategic disinvestment.

What is Strategic disinvestment/sale?

It refers to transfer of management control of the company along with sale of shares (equity)- either the entire equity or majority of it. Thus, ownership is also passed on to the buying company.

Can one PSE be strategically sold to another?

Yes.   As in the case of Hindustan Petroleum Corp Ltd (HPCL) being sold to Oil and Natural Gas Corp (ONGC). 

Are strategic disinvestment and privatisation same?

Yes. But only if the purchaser/investor is a private company. 

Is all disinvestment a case of strategic sale?

No. Shares can be sold to many groups of investors without any change in management control.

Is all strategic sale a case of disinvestment?

Yes. All strategic sale involves sale of shares called disinvestment.

Which PSUs are suggested for strategic sale?

Rashtriya Ispat Nigam (RINL), Container Corporation of India (Concor) and Shipping Corporation of India (SCI) for example.

Which agency has the dedicated function regarding disinvestment?

Department of Disinvestment and Public Asset Management in the Ministry of Finance.

What are the targets for 2019-20?

The Centre has set a target of raising Rs 1.05 lakh crore through disinvestment and strategic sale in the current fiscal.