Public Sector Enterprise (PSE) Policy

The Government notified the new Public Sector Enterprise (PSE) Policy on 4 February 2021.

• The policy on public sector enterprises provides a clear path for disinvestment in all non- strategic and strategic sectors and strengthens the idea of Minimum Government - Maximum Governance

Significance

• Disinvestment proceeds can be used to finance various social sector and developmental programmes
• Disinvestment shall infuse private capital, technology and best management practices in the disinvested CPSEs.

Scope

The new PSE Policy envisages classification of CPSEs into Strategic and Non-Strategic Sectors and exempts certain CPSEs such as those setup as not-for-profit companies under the Companies Act, 2013 or those supporting vulnerable and weaker sections of society, from the scope of the Policy.

Key Features

• The strategic sectors as per the policy are: atomic energy, space and defense; transport and telecommunication; power, petroleum, coal and other minerals; banking, insurance, and financial services.
  • These sectors are classified based on the criteria of national security, energy security, critical infrastructure, provision of financial services and availability of important minerals.
  • Only a bare minimum presence of CPSEs in the aforesaid strategic sectors is to be maintained.
• The non-strategic CPSEs will be privatized or otherwise shall be closed.