Public sector asset management framework changed: Finance Minister
Finance and Corporate Affairs Minister Nirmala Sitharaman said in Bengaluru on Friday that the public sector asset management framework in the country has changed, with the government recently making a directional change on public assets.
She was inaugurating a convention, “Making Wealth Through Markets”, as part of Azadi Ka Amrit Mahotsav being organized in 75 cities across the country at IISc here.
He said the nature of public sector asset management had changed as Budget 2021 introduced a directional change that the private sector would be allowed in all sectors except the four core/strategic sectors.
“This has generated a lot of interest in the private sector and as a result we are seeing the emergence of start-ups in the areas of defense and nuclear energy. This has encouraged private investors,” the minister said.
Initially, most investments used to be land-focused, centrally-driven and long-term involving the setting up of huge dams or power generation plants. In those days it was difficult to attract investment in these sectors from the private sector. But today, things had changed and there were private investors in the country who were able to successfully invest and run the business, according to Ms Sitharaman.
However, he clarified that the government has no plans to shut down any units. “Not to shut down a unit, but to run it professionally and profitably. We want to improve the functioning of our units so that they contribute to the growth of the economy. I want to divest the steel sector, bring down the cost of production, increase production and bring in more capital. According to him, DIPAM (Department of Investment and Public Asset Management) is working towards classifying AAA rated public sector enterprises and holding them as exchange traded stocks through the bond market route. Bharat Bond ETF currently accounts for 84% of the country’s total ETF market, with assets under management of over ₹53,000 crore.