Could the Power Grid Corporation of India Ltd become one of the first public sector units to sells its lucrative assets to raise funds for the central government? Indications coming from the Power Minister make it seem so.
Finance Minister Arun Jaitley had on Monday talked about third category for strategic sale of public sector undertakings, asset recycling.
“If there are 20 units in one PSU, we will divest two of them, in their place the PSU can set up two more new units. Let us take a power company for example. It can sell two units which can be taken over by the private sector and start its own two new units. So more units will be added to the economy with an upgraded technology,” he said.
Jaitley’s idea seems to have caught on with the Minister of State (Independent Charge) of Power, Coal and New & Renewable Energy, Piyush Goyal.
“I am open to all these ideas. We have already started working on it,” Goyal told BusinessLine .
“Let’s take the example of Power Grid Corporation of India Ltd. Why should it be sitting and holding on to its assets like transmission lines and towers which it has already set up, implemented and it has become a standard revenue stream which they will get for years? We could monetise those, bring down its debt and use the freed up capital to set up new projects and be competitive in the fresh bidding,” Goyal said.Hub of sales
In fact, the public sector units administered by the Ministry of Power could be the hub for assets sales under the strategic disinvestment policy of the government.
Under the strategic disinvestment policy, a Core Group of Secretaries on Disinvestment and NITI Aayog will become the key functionaries to proceed with such sales.
However, administrative ministries will also have an important role as they would work with NITI Aayog to identify companies where strategic stake sales or asset monetisation can take place.
Meanwhile, Goyal also said that the Clean Environment Cess on coal production which was doubled to ₹400 a tonne in the Budget, will have only a marginal impact on the power sector while giving a thrust to the government’s ambitious renewable energy programme.
“At the consumer end, the impact of the increase in the cess is about 12 paise a unit and on the whole the power sector will be impacted by about ₹ 6,000 crore. But my UDAY (Ujwal DISCOM Assurance Yojana) scheme alone will save ₹1,80,00 crore. In fact, the cess will help us with the renewable energy programme and meet the targets which are essential for UDAY to be a success,” he said.
Asked about the impact on public sector enterprises, Goyal said, “I do not see it affecting the performance of our companies. I am completely in favour of it. It is a move that demonstrates to the world that India is environmentally conscious and we are the only ones to have this sort of a carbon tax.”