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Economy
Mahesh

19/05/22 08:31 AM IST

Cabinet empowers Board of Directors of the holding, parent PSEs to allow disinvestment

In News 
  • The Union Cabinet approved a proposal for empowering the Board of Directors of the Holding / Parent Public Sector Enterprises to recommend and undertake the process for Disinvestment (both strategic disinvestment and minority stake sale) or closure of any of their subsidiaries/units/stake in JVs.
Other Proposals 
  • The Cabinet has also empowered Alternative Mechanism to accord ‘in principle’ approval for disinvestment (both strategic disinvestment and minority take sale) / closure of subsidiaries/units/sale of stakes in JVs of Holding / Parent PSEs [except the disinvestment (minority stake sale) of Maharatna PSEs which was delegated to them and review the process of disinvestment/closure by Parent / Holding PSEs.
Significance 
  • The aim is to expedite the decision-making process and cut wasteful expenditure by the PSEs.
  • Presently, the Board of Directors of Holding or Parent PSEs have been delegated certain powers under the Maharatna, Navratna and Miniratna categories to make equity investments to establish financial joint ventures and wholly-owned subsidiaries and undertake mergers or acquisitions subject to certain ceilings of net worth.
  • The proposal intends to reform the functioning of PSEs, by allowing greater autonomy to the Board of Directors of the Holding PSEs for taking decisions.
Source-PIB 

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