Latest news with #CPSEs
Time of India
21 hours ago
- Business
- Time of India
Govt eyes IBC route for STC, PEC closure
New Delhi: The government will have a relook at the closure of State Trading Corporation of India Limited (STC) and PEC Limited through the Bankruptcy Code, the first instance of pursuing closure of central public sector enterprises or CPSEs through this mechanism. Both these firms are categorised as a nonperforming asset or NPA with lenders. A senior government official confirmed that the closure of these two firms under the ministry of commerce and industry is now being examined through the Insolvency and Bankruptcy Code (IBC) mechanism. "Last month, after discussions at the level of the Prime Minister Office (PMO), it was decided to explore this route while also taking into consideration the existing guidelines for closure of sick and loss-making CPSEs," he said, adding that inter-ministerial discussions involving the finance, commerce and law ministries are now being pursued. A cabinet note on this matter is also being discussed. "We will examine the possible options and challenges involved because this would be the first such case," he added. A senior bank executive said closure through IBC route of state-owned firms will set a bad precedent, and may impact their lending strategies to government-owned firms. "That means there is no implied sovereign guarantee while extending credit to CPSEs, and that they should be treated at par with private sector firms. This will impact the ratings of these firms in the short term, and raise questions on government backing in these companies."
Mint
3 days ago
- Business
- Mint
Public capex is doing the heavy lifting, and the figures aim at a decade's high
New Delhi: Capital spending by large central public sector enterprises (CPSEs) and key infrastructure agencies could exceed ₹8.5 trillion in FY26, the highest in a decade, following a renewed push from the government to accelerate investments this fiscal year, two people familiar with the matter told Mint. The government aims to sustain economic momentum through strong public investment in infrastructure, at a time when private sector capital expenditure remains tentative and uneven, they said. Capital expenditure by CPSEs has risen sharply over the past decade, from ₹1.88 trillion in FY14 to ₹3.28 trillion in FY25, marking a 73.6% jump, according to data from the department of public enterprises, under the Union finance ministry. 'CPSEs have been nudged to maintain the momentum in FY26," said the first of the two persons mentioned earlier, both of whom spoke on the condition of anonymity. 'This will be a critical year to anchor growth as the global environment remains uncertain and private investment is yet to see a broad-based pick-up," the person added. A finance ministry spokesperson didn't respond to Mint's emailed queries. When combined with investments by infrastructure-heavy agencies such as highways and power ministries, total public capex has more than doubled, from ₹3.11 trillion in FY16 to ₹8.07 trillion in FY25, it added. For FY26, CPSEs and infrastructure agencies have set a capital expenditure target of ₹7.85 trillion. This sustained rise reflects the government's continued emphasis on public investment to spur growth and close critical infrastructure gaps. In recent years, CPSEs have taken centre stage in executing large-scale infrastructure and industrial projects, ranging from highways and ports to petroleum pipelines and power transmission networks, underpinning economic growth in the post-Covid era. 'As India aims for a sustained high-growth trajectory, the role of CPSEs in delivering timely and efficient capital spending will remain critical," said the second person. 'Their ability to execute large-scale projects swiftly and at scale makes them key to driving infrastructure-led growth, especially when private capex is still finding its footing," added this person. Sectors expected to see a spending boost this year include railways, oil and gas, renewable energy and heavy industries. The CPSE capex push is also expected to complement the Centre's capital outlay, which has steadily increased, from ₹11.11 trillion in FY25 to ₹11.21 trillion in FY26. In FY24, total capital expenditure by the Centre, CPSEs and state governments stood at ₹17.35 trillion, or 5.87% of GDP, up from ₹13.57 trillion (5.03% of GDP) in FY23, according to data from the ministry of finance. Capex had seen some fluctuation in the preceding years—It was ₹11.57 trillion (5.76% of GDP) in FY20, but fell to ₹10.70 trillion (5.39% of GDP) in FY21, before recovering to ₹12.57 trillion (5.33% of GDP) in FY22, underscoring the renewed focus on scaling up investments to power India's growth engine. India's gross domestic product (GDP) growth accelerated sharply to 7.4% in the final January-March quarter of FY25, rising from 6.2% in Q3, 5.6% in Q2 and 6.7% in Q1. For the full fiscal year, the economy expanded by 6.5%, slowing sharply from a 9.2% growth in FY24. The strong growth in Q4FY25 was fuelled largely by an impressive 10.8% expansion in construction activity and a 7.3% rise in services output. For FY26, India's GDP growth is expected at 6.3%-6.8% amid stable domestic macros despite global uncertainties.
Time of India
3 days ago
- Business
- Time of India
Time to polish our public sector ratnas: Creating an Indian sovereign wealth fund to recast jewels
In May 2020, as part of the Atmanirbhar Bharat package, the Indian government unveiled a bold new Public Sector Enterprise (PSE) policy. Building on that announcement, the Union Budget of February 1, 2021, laid out a detailed blueprint, categorising sectors into two: Strategic sectors, where the government would retain only a bare minimum presence, and by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Memperdagangkan CFD Emas dengan salah satu spread terendah? IC Markets Mendaftar Undo Non-strategic sectors, where all Central Public Sector Enterprises (CPSEs) would be privatised or closed. This marked a tectonic shift in India's approach to public sector enterprises- a clear intent to significantly reduce the government's footprint in business. While implementation is underway, progress has been uneven. This note proposes a bold, agile framework to fast-track the reform. Traditional Routes of Privatisation: Limited Success For privatisation India has predominantly relied on strategic sales since the 1991 liberalisation era divesting 50% or more equity along with management control. However, another way of privatisation is public market offerings i.e. selling shares of CPSEs to retail and institutional investors. This method was famously deployed by Margaret Thatcher's UK government during its privatisation drive of British Telecom, British Gas, and British Steel. Live Events In India, the strategic sale model has yielded mixed results. The successful sale of Air India came after years of delays. Meanwhile, marquee targets such as BPCL, Shipping Corporation, and IDBI Bank have faced hurdles. BPCL's disinvestment , announced in 2019, was shelved in 2022 as bidders withdrew, the government decided to hit pause to the disinvestment: a prudent decision prioritising value over timelines. Strategic sales are often complex, politically sensitive, and time-consuming, limiting their effectiveness as the default path to reform. Learning from Singapore: The Temasek Model The third approach is Singapore's model: move the ownership to an SWF, then sell publicly. Singapore faced a similar challenge as India in the 1970s, dozens of government-owned enterprises across critical sectors, struggling under state management. The solution was to create Temasek Holdings, the Sovereign Wealth Fund of Singapore which was established in 1974 as a professionally run, wholly government-owned investment company. Temasek operates with full autonomy, managed by an independent board of professionals and free from political interference. It holds and grows equity in state-owned enterprises on commercial principles. Many of these entities are now listed and globally competitive, contributing to a portfolio exceeding US$301 billion. While India is not Singapore, the core principle of insulating commercial decisions from political control is powerful and relevant. A Case for India's Temasek: Transforming NIIF India has attempted some separation by routing disinvestment decisions through DIPAM. However, this still functions within the government's bureaucratic framework. What India truly needs is a Sovereign Wealth Fund (SWF) that can own and manage public assets commercially. This is where the National Investment and Infrastructure Fund (NIIF) enters: India's quasi-sovereign investment vehicle, created in 2015, where the government holds a 49% stake. With assets of over $5 billion across infrastructure, growth equity, and fund-of-funds, NIIF already has the structure to become India's Temasek. Even Temasek saw potential in NIIF, investing $400 million in 2018. It now needs a wider mandate that would allow it to become the Indian Temasek. The Model: Ownership Transfer, Commercial Management The government could begin by transferring its stakes in select PSEs to NIIF, receiving fund units in exchange. The state would retain economic interest while stepping away from operational control. These PSEs would then be run under professional governance standards, free from day-to-day political interference. Over time, NIIF could gradually dilute its stake in these enterprises in the market when conditions are favourable creating a steady revenue stream for the government, rather than volatile, one-time windfalls. The government could begin with minority stakes transfer, building credibility and demonstrating value creation, and eventually reduce its holding below 51% as per Atmanirbhar Bharat package. A Pragmatic, Politically Smart Path This stealth-privatisation model i.e. first shifting ownership to NIIF, then progressively privatizing, shields the process from political turbulence while ensuring the commercial interests of the state are protected. It provides PSEs with the time, autonomy, and resources to restructure and become market-ready, aligning with the 2021 policy objective of one strategic PSE per sector. As Thomas Jefferson aptly put it, 'That government is best which governs least.' It's time we let our Ratna shine with the polish of professionalism, and free them from the weight of the state's hand.
Economic Times
3 days ago
- Business
- Economic Times
Time to polish our public sector ratnas: Creating an Indian sovereign wealth fund to recast jewels
Tired of too many ads? Remove Ads Traditional Routes of Privatisation: Limited Success Tired of too many ads? Remove Ads Learning from Singapore: The Temasek Model A Case for India's Temasek: Transforming NIIF Tired of too many ads? Remove Ads The Model: Ownership Transfer, Commercial Management A Pragmatic, Politically Smart Path (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of .) In May 2020, as part of the Atmanirbhar Bharat package, the Indian government unveiled a bold new Public Sector Enterprise (PSE) policy. Building on that announcement, the Union Budget of February 1, 2021, laid out a detailed blueprint, categorising sectors into two:Strategic sectors, where the government would retain only a bare minimum presence, andNon-strategic sectors, where all Central Public Sector Enterprises (CPSEs) would be privatised or marked a tectonic shift in India's approach to public sector enterprises- a clear intent to significantly reduce the government's footprint in business. While implementation is underway, progress has been uneven. This note proposes a bold, agile framework to fast-track the privatisation India has predominantly relied on strategic sales since the 1991 liberalisation era divesting 50% or more equity along with management control. However, another way of privatisation is public market offerings i.e. selling shares of CPSEs to retail and institutional investors. This method was famously deployed by Margaret Thatcher's UK government during its privatisation drive of British Telecom, British Gas, and British India, the strategic sale model has yielded mixed results. The successful sale of Air India came after years of delays. Meanwhile, marquee targets such as BPCL, Shipping Corporation, and IDBI Bank have faced hurdles. BPCL's disinvestment , announced in 2019, was shelved in 2022 as bidders withdrew, the government decided to hit pause to the disinvestment: a prudent decision prioritising value over sales are often complex, politically sensitive, and time-consuming, limiting their effectiveness as the default path to third approach is Singapore's model: move the ownership to an SWF, then sell faced a similar challenge as India in the 1970s, dozens of government-owned enterprises across critical sectors, struggling under state management. The solution was to create Temasek Holdings, the Sovereign Wealth Fund of Singapore which was established in 1974 as a professionally run, wholly government-owned investment company. Temasek operates with full autonomy, managed by an independent board of professionals and free from political interference. It holds and grows equity in state-owned enterprises on commercial principles. Many of these entities are now listed and globally competitive, contributing to a portfolio exceeding US$301 India is not Singapore, the core principle of insulating commercial decisions from political control is powerful and has attempted some separation by routing disinvestment decisions through DIPAM. However, this still functions within the government's bureaucratic framework. What India truly needs is a Sovereign Wealth Fund (SWF) that can own and manage public assets is where the National Investment and Infrastructure Fund (NIIF) enters: India's quasi-sovereign investment vehicle, created in 2015, where the government holds a 49% stake. With assets of over $5 billion across infrastructure, growth equity, and fund-of-funds, NIIF already has the structure to become India's Temasek saw potential in NIIF, investing $400 million in 2018. It now needs a wider mandate that would allow it to become the Indian government could begin by transferring its stakes in select PSEs to NIIF, receiving fund units in exchange. The state would retain economic interest while stepping away from operational PSEs would then be run under professional governance standards, free from day-to-day political interference. Over time, NIIF could gradually dilute its stake in these enterprises in the market when conditions are favourable creating a steady revenue stream for the government, rather than volatile, one-time government could begin with minority stakes transfer, building credibility and demonstrating value creation, and eventually reduce its holding below 51% as per Atmanirbhar Bharat stealth-privatisation model i.e. first shifting ownership to NIIF, then progressively privatizing, shields the process from political turbulence while ensuring the commercial interests of the state are provides PSEs with the time, autonomy, and resources to restructure and become market-ready, aligning with the 2021 policy objective of one strategic PSE per Thomas Jefferson aptly put it, 'That government is best which governs least.' It's time we let our Ratna shine with the polish of professionalism, and free them from the weight of the state's hand.
New Indian Express
6 days ago
- Business
- New Indian Express
Forest land diversion stalls IREL project in Odisha
BHUBANESWAR: Land acquisition hurdles continue to plague key infrastructure and industrial projects in Odisha with central public sector enterprises (CPSEs) now voicing concerns. The IREL (India) Ltd (formerly Indian Rare Earths Ltd) has flagged serious issues over forest land diversion delaying its joint venture mining project in Krushnaprasad area in Puri district. The central PSU under the Department of Atomic Energy, in partnership with the Odisha government's Industrial Development Corporation (now merged with Odisha Mining Corporation), had formed IREL-IDCOL, a joint venture company for the extraction of strategic and atomic minerals from the Krushnaprasad heavy mineral deposit. Sources said the project, which received a letter of intent (LoI) from the Steel and Mines department on June 17, 2022, aimed at extracting Monazite, Zircon, Ilmenite, Rutile, Sillimanite, and Garnet, minerals vital to India's strategic interests, especially Monazite, which contains Thorium and rare earth elements. However, the project has run into hurdles due to forest classification issues in the proposed mining area. Of the 852.45 hectares (ha) identified in the LoI, around 581 ha were later determined to be forest land, much of it under the Pitisal proposed reserve forest. Initially, Chilika DFO permitted a differential GPS (DGPS) survey over 540 ha of forest land but following a survey, Krushnaprasad tehsildar authenticated the presence of 580.8 ha of forest land within the lease area. Subsequently, the joint venture company submitted applications for environmental and forest clearances last year. While the forest diversion proposal was cleared by the project screening committee on October 7, 2024, complications arose during subsequent site inspections.
