The Union Cabinet, led by Prime Minister Shri Narendra Modi, has approved a proposal to empower the Board of Directors of Holding / Parent Public Sector Enterprises to recommend and implement a Disinvestment process (both strategic spending and the sale of small shares) or the closure of any subordinate companies / units / stake. JVs. . of the Maharatna PSEs were assigned to them and reviewed the process of disbursement / closure of Parent / Holding PSEs.
The process of operating / closing an investment strategy to be followed by PSEs should be open, based on competitive bidding principles and aligned with the guidelines that should be set. With strategic investment, such guiding principles will be put in place by DIPAM. To close, the DPE will issue guidelines.
Currently, the Board of Directors of Hosting / PSE Parents are empowered under the divisions of Maharatna, Navratna and Miniratna to make equitable investments to establish joint venture financial institutions and subsidiary companies and to make mergers / acquisitions subject to certain net-value additions. However, the Boards do not have the power to disburse funds / closure of subsidiaries / units / shares in JVs, other than the limited powers vested in the Maharatna PSEs for the abolition of minority shares in subsidiaries. Therefore, Cabinet / CCEA approval was required by Holding / Parent CPSEs, to avoid investments (both strategic spending and the sale of small stakes) / closure of subsidiaries / units or the sale of their shares in the JV, regardless of size / operating expenses for those subsidiaries, etc. In line with the spirit of the new PSE policy, 2021 to reduce the existence of Government PSEs and operational requirements, further powers have been given to this issue with this decision.
The proposal aims to transform PSE operations, by allowing greater independence for the Board of Directors of Holding PSEs by making decisions and recommending timely departure from their investments in Subsidiary / Units or JVs, which will enable them to make money by investing in their subordinate companies. / units / JVs at the right time or close their losses and unit / unit / JV not working properly at the right time. This will lead to faster decision-making and savings of operating / waste expenditure by PSEs.
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