New Delhi, February 12 A parliamentary panel on Thursday emphasized the need to implement the new Public Sector Enterprise (PSE) Policy without delay to achieve the intended objectives of fiscal prudence.
The new PSE Policy for Atmanirbhar Bharat envisages that loss-making public sector undertakings (PSUs) in non-strategic sectors should be considered for privatization or closure.
"This policy aims to promote fiscal prudence and efficient resource allocation. However, not much headway has been made in this regard as the proposal for disinvestment of any non-strategic CPSE has not been approved since the guidelines were issued in December 2021," the Standing Committee on Finance said in its report.
The New Public Sector Enterprise (PSE) Policy for Atma Nirbhar Bharat, which also provides overall guidance on strategic disinvestment, was notified on February 4, 2021, with the approval of the Cabinet. The policy intends to minimize the presence of the government in PSEs across all sectors of the economy.
The New PSE policy delineates four strategic sectors based on the criteria of national security, energy security, critical infrastructure, provision of financial services and availability of important minerals.
The bare minimum presence of the existing public sector commercial enterprises at the holding company level will be retained under government control in the strategic sectors. The remaining will be considered for privatization or merger, or subsidiarisation with another PSE or for closure.
The panel, headed by BJP leader Bhartruhari Mahtab, said that the New PSE Policy represents a paradigm shift toward fiscal prudence, yet its translation into tangible outcomes remains sluggish.
"While acknowledging the ministry's submission that disinvestment is a "continuous process" contingent upon external variables — such as investor interest, sectoral dynamics, and market conditions — the Committee opines that the prolonged stagnation suggests a gap between policy intent and implementation," the action taken report said.
The Committee recommended that specific concrete measures be taken to accelerate the process for achieving the intended objectives of fiscal prudence and efficient allocation of public resources.
Further, the Committee reiterated that the incentive packages offered to states for undertaking similar state-level PSU reforms should be comprehensively reviewed, with a view to enhancing their attractiveness and more effective participation by states in the reform process.