Cabinet allows ministerial panel to decide on price, timing of CPSE sale
08 March 2019
The Union Cabinet on Thursday decided to authorise the finance minister-led alternative mechanism (AM) to take a call on strategic disinvestments, announced measures to promote power generation, and declared an interest subsidy of up to Rs3,355 crore on loans taken by sugar mills to boost ethanol production.
Addressing the media after the cabinet meeting, finance minister Arun Jaitley said the Cabinet Committee on Economic Affairs (CCEA) has empowered the AM to decide on the on price and timing of sale of stake in central public sector enterprises.
The ministers’ panel was set up in 2017 to look into the strategic sale of central public sector enterprises (CPSEs) — to decide on quantum of shares to be transacted, the mode of sale and the final pricing of the transaction, or lay down guidelines for such pricing, the selection of strategic partner or buyer, and the terms and conditions of sale.
The AM, which will comprise Jaitley, road transport minister Nitin Gadkari and the minister representing the administrative department concerned, can now decide on the quantum of shares to be transacted, the mode of sale and the final pricing of the transaction.
It can also lay down the principles or guidelines for such pricing and the selection of a strategic partner or buyer, Jaitley said.
So far, the AM has decided only on the terms and conditions of the CPSE sale from the stage of inviting of expressions of interest (EoIs) till inviting of financial bid.
The cabinet also cleared a proposal to give interest subvention of up to Rs3,355 crore to the sugar industry for increasing production of ethanol for the fuel blending programme.
The subsidy will be given on the Rs12,900-crore bank loans given to sugar mills for augmenting ethanol production, as well as on the Rs2,600 crore to be given to molasses-based standalone distilleries.
Additionally, the cabinet gave its nod to a slew of measures to promote hydro and thermal power production in the country. It decided to declare hydropower projects as renewable energy projects and announced steps to facilitate the availability of coal to thermal projects with shorter term power purchase agreements. It also made it mandatory for Discoms delaying payments to pay a late-payment surcharge.
Apart from clearing the Rs30,849-crore Phase-3A of Mumbai Urban Transport project, the cabinet gave its nod to Delhi Metro’s 62-km-long Phase-4 as well as to a plan to revive under-used air strips in different parts of the country.