Government Mulls Amendments to Boost Privatisation Efforts

The Economic Survey suggests reducing the government ownership minimum in public sector units to 26%, facilitating privatisation while retaining control. This would redefine 'government company' under the Companies Act. Recent strategic disinvestments include NTPC's divestment and mobilizing funds via Offer for Sale transactions.

The Economic Survey, released Thursday, advocates for amending the definition of a 'government company' by reducing the ownership threshold. The suggestion aims to lower it from 51% to 26%, allowing effective control while enabling further privatisation.

The change would permit retained special resolution rights, critical for maintaining influence in key decisions. The survey, led by Chief Economic Advisor V. Anantha Nageswaran, proposes continued phased divestment without altering the legal definition of a government company, thus facilitating an eventual full exit without losing 'public sector' status.

Recent measures include stake dilution in NTPC's joint ventures and three Offer for Sale (OFS) transactions, raising significant capital. The government is diversifying ownership in privatisation-bound CPSEs to encourage professional management and consistent governance standards.

(With inputs from agencies.)