Economic Survey asks government to revamp PSU companies’ boards, do more IPOs

Economic Survey asks government to revamp PSU companies’ boards, do more IPOs

MUMBAI: The economic survey for 2020-21, released earlier today, called for the government to completely revamp the boards of state-owned central enterprises to reorganise their structure, enhance operational autonomy and improve corporate governance through listing on the stock exchanges for greater transparency.

The government is currently in the midst of ideating a divestment plan for public sector undertakings under which it will look at privatising central public sector enterprises in non-strategic sectors. “This initiative is expected to bring healthy competition in sectors and will also assist the government to focus extensively on ‘strategic sectors’,” the economic survey noted.

The Department of Public Enterprises has separately initiated revamping of the Performance Monitoring system of the CPSEs to make it more objective and forward-looking based on sectoral indices or benchmarks, the economic survey said.

The government had aimed for disinvestments worth Rs 2.1 lakh crore in the current fiscal year. However, because of the Covid-19 pandemic and its inability to conclude the privatisation of Air India and Bharat Petroleum Corp, it is expected to miss that target by a wide mark.

In the upcoming fiscal year, economists have projected that the government could set a disinvestment target of Rs 1.2 lakh crore, not accounting for a possible stake sale in the country’s largest life insurer Life Insurance Corp of India.

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