‘Save PSUs’ campaign gains steam as disinvestment goals not met

Unviable Privatisation

- Disinvestment target for FY24 is Rs 51,000 cr

- 94,281 cr from disinvestment and dividends during FY23

- Disinvestment short of target by Rs 14,707 cr in FY23

Visakhapatnam: With the Department of Public Investment and Asset Management (DIPAM) under the Ministry of Finance failing to achieve the disinvestment target for four years in a row, the trade unions and officers’ organisations have stepped up campaign to save public sector units (PSUs) from privatisation and partial stake sale.

Incidentally, the dividends that the central government received from PSUs have exceeded the revenue from disinvestment. There are also doubts overachieving disinvestment target set for FY24, which has been put at Rs51,000 crore after slashing the target for FY23 from Rs65,000 crore to Rs 50,000 crore. Meeting disinvestment target for FY24, as per market observers, is likely to be further disappointing as general elections are due next year and the Narendra Modi Government is eyeing a third consecutive term.

National Confederation of Officers Associations (NCOA) vice-president Katam SS Chandra Rao told Bizz Buzz that as the revenues received from dividends from the public sector is far ahead of the realisation from disinvestment, the Indian Government should see reason in their demand not to tamper with the equity structures of companies like Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP).

Official sources said Dipam, which pilots the government’s disinvestment drive, has received Rs 94,281 crore from disinvestment and dividends during FY23. The receipts from dividends stood at Rs 58,988 crore while the proceeds from the disinvestment was a meagre Rs35,293 crore. The disinvestment target fell by Rs 14,707 crore.

During the just-concluded financial year, privatisation of Neelachal Ispat Nigam Ltd (NINL) and takeover of Air India by Tata Group did not fetch anything to the exchequer. NINL owned a 1.1 million tonne steel plant near Jajpur in Odisha, which was shut down for a long time due to lockdown. The government did not get anything from the sale proceeds as it did not have any equity in it directly.

Whatever the government got during the last fiscal was only through minority disinvestment such as share buyback, IPO and offer for sale (OFS) in Life Insurance Corporation, ONGC, Gas Authority of India Ltd (GAIL), Hindustan Aeronautics Ltd and IRCTC.

“We strongly appeal to the government to stop disinvestment and strengthen the public sector units. For instance, Visakhapatnam Steel Plant can be made a highly profitable unit by allotting captive iron ore mines and infusing funds to meet working capital requirements so that it can increase its capacity in phases from 7.3 million tonnes to 15 million tonnes per annum,” AITUC national general secretary D Adinarayana said.

Former RINL Director (Operations) KK Rao speaking at a recent meeting said merger of RINL with SAIL will make them not only a steel giant but also will be mutually beneficial and make them profitable.