The NITI Aayog will replace the disinvestment commission by assisting the government in the divestment process by identifying central public sector enterprises (CPSEs) for strategic disinvestment and suggest methods for their valuation apart from advising the government on mode and percentage of shares to be sold in a CPSE.
The government today approved the proposal of the Department of Investment and Public Asset Management for laying down the procedure and mechanism for strategic disinvestment of central public sector enterprises (CPSEs).
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi has given its approval for the procedure and mechanism for strategic disinvestment. This has also been announced by the finance minister in his budget speech yesterday.
The finance ministry has issued instructions on procedures and processes for strategic disinvestment.
In the past, strategic disinvestment followed the recommendation of the disinvestment commission. In a major departure, in the approved process, the NITI Aayog would perform the role of erstwhile disinvestment commission. In fact, the role of NITI Aayog is larger as it would also identify CPSEs for strategic disinvestment and suggest methods for valuation of the CPSE apart from advising the government on mode and percentage of shares to be sold in a CPSE.
The government also approved the constitution of a core group of secretaries on disinvestment (CGD) headed by the cabinet secretary to supervise and monitor the process of implementation of CCEA decisions on strategic disinvestment.
The administrative department/ministry would be responsible for valuation of the CPSE. They would also appoint asset valuers for strategic disinvestment. An evaluation committee (EC) would consider the valuation and fix the reserve price. This would be an inter-ministerial committee headed by FA level officer.
The government would also appoint an independent external monitor (IEM) to vet the process and settle grievances.
The finance ministry has also been authorised to put in place an appropriate mechanism for protection of strategic disinvestment.