NITI Aayog to mind the store at public sector units

The NITI Aayog, which was set up as a successor to the Planning Commission, to work as a think tank to the government for providing policy inputs as well as designing strategic and long-term programmes for the Centre and the States, now seems to have taken the role of a supervisor for public sector units (PSUs).

The NITI Aayog, besides identifying PSUs for strategic sales and monitoring the closure of loss making firms, a job being implemented by the Department of Investment and Public Asset Management, is also giving approvals to the state-run entities to set up financial joint ventures, a power which rested with company boards.

The Department of Public Enterprises, which essentially monitors the functioning of state-owned entities, has recently come out with guidelines asking the PSUs to seek ‘concurrence’ from NITI Aayog for such joint ventures.

This is with an aim to ensure that the deployment of public funds in such joint ventures and subsidiaries is made after “due scrutiny and adequate justification”, it said.

The guidelines, according to the circular, will protect the government’s interests and ensure norms of fiscal prudence are followed.

Earlier, the Boards took a call on technology joint ventures and strategic alliance. If need be nod from the administrative Ministry was sought.

To check the “proliferation of financial joint ventures and wholly owned subsidiaries” by Maharatna, Navratna and Miniratna PSUs , the Department of Public Enterprises has said that once such proposals are cleared by the Boards, administrative ministries must also seek the approval of the NITI Aayog.

The concerned administrative Ministry or Department will obtain the concurrence of the NITI Aayog of such proposals on a case-to-case basis and firm up its views as a stakeholder for the Board’s deliberations to take an appropriate decision, it said.

“The DPE continues to be the nodal authority for all PSUs. But, in some instances like this, the NITI Aayog has been brought in as an additional layer of oversight,” said an official familiar with the matter.

Earlier, in the Union Budget 2016-17, Finance Minister Arun Jaitley had entrusted the responsibility to identify PSUs for strategic sale to the NITI Aayog, which has already submitted a two-part report on the issue and is working on the other report.

Similarly, the DPE in its guidelines on time-bound closure of sick and loss making PSUs had empowered the NITI Aayog to monitor the exercise based on the prescribed timelines.

It had also called for setting up of an oversight committee in the Aayog. The guidelines had also directed Ministries to consult with the think-tank for resolution of any problem or dispute from the sale of immovable assets of the PSUs being closed down.

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