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New ‘Public Sector Enterprise Policy’

Topics Covered: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

New ‘Public Sector Enterprise Policy’:


Context:

The government recently released a new ‘Public Sector Enterprise Policy’.

Under the New Policy:

  1. Strategic: Atomic energy, space, defence, trans and telecom, power, petro, coal, other minerals, banking, insurance and financial services will be classified as strategic sectors.
  2. Privatization: The remaining companies in strategic sectors will be considered for privatization/merger/closure and non-strategic sectors will be considered for privatization, where feasible or for closure.
  3. In strategic sectors, the minimum presence of existing companies at the holding level will be retained under government control.
  4. The strategic sectors have limited number of players restricting it to maximum four public sector enterprises of the holding nature.

Significance:

Having a robust disinvestment policy would be critical for the government at a time when it needs resources to bridge the fiscal gap and for spending on key policy initiatives to battle Covid-19 pandemic affected economy.

Sources: the Hindu.