DIPAM to ensure unlisted PSUs pay dividend or buyback shares

New Delhi: Finance Ministry today said the rechristened Department of Disinvestment will ensure that the unlisted PSUs with huge cash piles either pay special dividend or buyback government shares and gradually move towards listing.

In Budget 2016-17, the government had decided to rename the Department of Disinvestment as Department of Investment and Public Asset Management (DIPAM) and its responsibilities would include efficient management of the government investment in CPSEs.

"Public asset management would also include buyback of shares. Companies which are 100 per cent owned by the government, which have lots of cash, if they do not have capital expenditure plan and they are sitting on idle cash year after year, they should either pay special dividend or buyback government shares," Economic Affairs Secretary Shaktikanta Das said at a Ficci event here.

He said the DIPAM would be entrusted with the task of deciding which PSUs are eligible to get listed, in order to realise its true value in the market.

"This department (DIPAM) is going to take a comprehensive view of the management of government investments and government assets," he said, adding that it would also decide on what the level of government equity should be in any particular PSU.

Budget 2016-17 has fixed a disinvestment target of Rs 56,500 crore. Of this, Rs 36,000 crore is estimated to come from minority stake sale and another Rs 20,500 crore is being targeted from strategic stake sale.

"2016-17 disinvestment target has been very carefully worked out. We are quite confident that disinvestment target will be achieved and it is quite reasonable. Rs 20,500 is a very reasonable target which will be achieved," Das added.

As regards capital infusion in PSU banks, Das said Budget has earmarked Rs 25,000 crore for capitalisation and whatever excess amount will be required would be provided for.

Further Reserve Bank has announced amendments to recognise more balance sheet items of the state run lenders as tier-I equity capital.

"Budget has announced Rs 25,000 crore for capital infusion. RBI has also issued circular where additionally upwards of Rs 25,000 crore Tier 1 capital gets added to the balance sheets of PSU banks. So we are looking at about Rs 50,000 crore is on the table. Reclassification (by RBI) is very very reasonable. The assets of PSBs need to be revalued from time to time," Das added.

He said the central bank and ministry are working together on NPAs and the problem is being very meticulously and carefully addressed. Besides, banks are taking special efforts for recoveries.