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The Finance Ministry has sought the help of Financial Advisers — senior bureaucrats posted in various ministries — to get Central Public Sector Enterprises (CPSEs) listed on bourses. The Ministry has sent an office memorandum (OM) to all the Financial Advisers in this regard.
Many Financial Advisers are also placed on the boards of the CPSEs belonging to their ministries.
The OM says, “The Financial Advisers, who are on the Board of CPSEs, are requested to emphasise the benefits of listing and get the CPSEs listed in compliance with the disinvestment policy. Financial Advisers are requested to advise the CPSEs that consequent to listing such companies would be better able to tap the capital market for capital expenditure requirements instead of depending on Government Finances.”
According to the Department of Disinvestment's Web site, there are over 160 unlisted CPSEs. As of end of the last fiscal, 94 showed profits. The Web site further says that 50 listed CPSEs contribute nearly 20 per cent of total market capitalisation of the country. Market capitalisation is the total value of tradable shares of a listed company.
Move To achieve target
The move has come at a time when the Government has fixed a target of Rs 30,000 crore to be realised by divesting stake in CPSUs. With the stock market experiencing turbulence, the Government missed its disinvestment targets during last two financial years.
The Government set a target of Rs 40,000 crore for 2010-11, but realised only around Rs 22,000 crore. The situation worsened in 2011-12, when it got just Rs 1,144.55 crore as against the target of Rs 40,000 crore.
This OM is also important at a time when the Government is talking about check on its expenditure and change in the usage of National Investment Fund. All the disinvestment proceeds are deposited in this fund. The Government has constituted a high-level committee under the chairmanship of the Cabinet Secretary to suggest ways for revamping the fund for better and more productive use of the proceeds.
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