Finance Minister Nirmala Sitharaman has said that the Government will come out soon with a new policy on Public Sector Enterprises (PSEs) to define strategic sector with limited number of Government-owned companies.

As a part of ‘Aatmanirbhar Bharat Abhiyan’, Sitharaman had earlier talked about the need for a new coherent policy, where all sectors are open to the private sector while PSEs will play an important role in defined areas. Accordingly, government will announce a new policy whereby list of strategic sectors requiring presence of PSEs in public interest will be notified. In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed. In other sectors, PSEs will be privatized for which timing to be based on feasibility. To minimize wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four, others will be privatized/ merged/ brought under holding companies.

“We are working on it (proposed policy) and it should go to Cabinet soon,” she told media here. Further, she added that there could be various models to achieve minimum four PSUs in case of those falling under the strategic sector. Either they will be merged, or they will be brought together in such a way that there are only four or lesser.

There are various media reports suggesting banking, insurance, defence, atomic energy, space, oil and railway could be declared as strategic sectors and accordingly restructuring could take place. As of now, there are nearly 250 Central Public Sector Enterprises (CPSEs).

GST compensation

She mentioned that Attorney General’s view on GST compensation was sought after consultation with the States. The GST Council, chaired by the Union Finance Minister and comprising state counterparts, had in March decided to seek views from the AG on the legality of market borrowing by the Council to make good the shortfall in compensation fund.

“The opinion has come...we will hold an exclusive GST Council meeting on the issue of compensation,” Sitharaman said, adding that the date of the meeting will be decided shortly. However, she did not give any details about opinion, thought sources said that opinion talks about no obligation on part of Centre to pay compensation and it can allow States to borrow to meet the shortfall.

Status of economy

Speaking about the state of economy, she said it is definitely trying to come out of difficulty but there is no complete picture at this point of time due to uncertainty around the pandemic. Value chains are getting disrupted due to containment zones in many parts of the country because of the pandemic, she explained.

Emphasising that the Prime Minister is speaking with various stakeholders on regular basis to get feedback on the evolving situation, she said the government is keeping all options open to help support economy. There are some kinds of green-shoots but the government is cautious about these parameters, she said, adding that the economy is at a stage where every sector is trying to beat pandemic and revive.

“Hopefully this spirit will help revive the economy, and the government is willing to hear and keep all options open...RBI has reached out to the industry with liquidity, and other than just monitoring inflation it has also kept growth in mind. Economy will benefit from this,” she said.

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