The DIPAM has raised objections to the list prepared by Niti Aayog for monetising assets of CPSEs, saying the stipulated procedure, including consultation with administrative ministries and other government departments, should be followed before finalising such lists.
Niti Aayog has given a list of around 50 assets, including land and building, of state-owned companies for sale to the Department of Investment and Public Asset Management (DIPAM), a wing of the Finance Ministry which deals with disinvestment.
Following this, the DIPAM wrote to Niti Aayog saying that the government think tank should follow the procedure and mechanism for asset monetisation of Central Public Sector Enterprises (CPSEs) as laid down in the March 8 office memorandum issued by it, sources said.
As per the memorandum, Niti Aayog has been tasked to recommend the assets for monetisation after consultation with a group comprising representatives of the administrative ministry, DIPAM, Department of Economic Affairs and Department of Public Enterprises.
While recommending the assets for monetisation, the consultative group has been mandated to consider various factors, including the tentative value of assets, their strategic nature, location, and also situation analysis with respect to law and order. It would also look into whether the assets can be easily ring-fenced, and also its revenue potential.
The sources said Niti Aayog is expected to redraft the list of assets for monetisation after following the consultative process along with analysis, nature and value of the assets.
Unless the due process is followed, the list does not serve any purpose as the names of assets just keep piling up whereas the entire valuation and due diligence has to be done afresh by DIPAM, the sources said.
Niti Aayog was earlier tasked with drafting list of CPSEs which can go in for strategic sale. It has so far submitted a list of over 35 companies, of which only about 4 companies have been actually sold.
The sources said that in absence of due diligence on the part of Niti Aayog, it would not be possible for the DIPAM to fast track the process of an asset sale.
According to the guidelines for monetising assets, an inter-ministerial group (IMG), chaired by DIPAM Secretary, will identify the non-core assets of the CPSEs on its own and also on the basis of recommendations of the Niti Aayog. The final call, however, will be taken by the finance minister-headed panel.
Once the alternative mechanism, comprising the finance minister, road transport minister and the minister of concerned administrative ministry, approves the assets for monetisation, it should be completed within 12 months from the date of approval.
The amount raised through the sale of non-core assets would form part of the disinvestment proceeds. The government has set a target of Rs 90,000 crore to be raised through CPSE disinvestment in the current financial year, up from the Rs 85,000 crore mopped up in the previous financial year.In the current fiscal, the government has so far raised Rs 2,350.25 crore from disinvestment.