Press Trust of India
New Delhi, August 9: Profit-making unlisted PSUs and their subsidiaries may have to submit listing plans while signing annual performance pacts with the government, a move aimed at helping the Centre garner resources and unlocking the value of many state-owned firms. The Finance Ministry, according to a senior official, has suggested to the Department of Public Enterprises that listing clause be made mandatory under the new MoU norms for public sector units (PSUs).
Out of about 160 profit making CPSEs, only 43 are listed on the BSE. The major unlisted profit making CPSEs include RINL, ONGC Videsh, Coal India subsidiaries, Airports Authority of India and Hindustan Aeronautics Ltd. “The disinvestment department has suggested to the DPE that when they sign the MoUs with PSUs, listing plans should be made mandatory,” a senior finance ministry official told PTI. DPE comes out with guidelines for the Memorandum of Understanding every fiscal. Under the existing norms, the central PSUs have to list out their objective, commitments, performance assessment targets, financial and non financial targets to the government.
MoUs are signed between PSUs and their administrative ministries/departments and is facilitated by DPE. The subsidiaries are required to sign MoUs with the parent firms. The listing, according to another official, would help to unlock the true value of a profit making PSU and give public ownership in the company. “Listing of a PSU helps to increase corporate governance by way of timely disclosures, greater professionalism and protection of investor interest,” said the official. Listing of PSUs would also help the government raise resources to meet disinvestment targets and bridge fiscal gap. The government, which has been missing its disinvestment targets for past five years, proposes to raise a mammoth Rs 69,500 crore from PSU stake sale in 2015-16.
