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Government Eyed on Fertilizers PSU's for disinvestment

The government has identified eight fertilizer Public Sector Undertakings (PSUs), including Rashtriya Chemicals & Fertilisers (RCF) and National Fertilizers (NFL), for strategic disinvestment.

Other PSUs identified for divestment are Brahmaputra Valley Fertilizer Corporation (BVFCL), FCI Aravali Gypsum and Mineral (FAGMIL), Madras Fertilizers (MFL), Fertilizer Corporation India (FCIL), Fertilizers and Chemicals Travancore (FACT), and Hindustan Fertilizer Corporation (HFCL), according to sources.

A proposal for divestment of these PSUs was discussed in a meeting of the Core Group of Officers, chaired by CEO, NITI Aayog a few days back. The names of these PSUs were discussed and almost every member in principle agreed with the proposal. However, the final decision is yet to be taken.

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The meeting was attended by senior officials from the Department of Public Enterprises (DPE), DIPAM, Department of Economic Affairs and Department of Fertilisers.

DPE, NITI Aayog and the Department of Fertilisers did comment on the story.

The new PSE policy

This divestment exercise is part of the New Public Sector Enterprises (PSEs) policy announced by Finance Minister Nirmala Sitharaman on May 17, 2020. Under the policy, PSUs in non-strategic sectors will be privatised, closed, merged or brought under holding companies.

As per work allocation, the first step of this policy is to identify PSUs under non-strategic sectors for strategic disinvestment/merger/closure. This responsibility has been given to the DPE.

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A source said DPE had identified the eight PSUs, which are under the administrative control of the Department of Fertilisers, for disinvestment.

The Union government is the majority stakeholder in all these companies. It holds 75 percent stake in RCF, 74.71 percent in NFL, 90 percent in FACT, and 85.27 percent in Madras Fertilisers.

The second source said despite the strategic disinvestment there won't be any impact on fertilizer subsidy disbursement.

However, the third source, who attended the meeting, told Moneycontrol that strategic disinvestment in fertilizer sector PSUs will not be as easy as it is one of the politically sensitive sectors. Even the Department of Fertilisers is not showing enthusiasm. After the identification of PSUs, DPE had to send three to four reminders to the Department of Fertilisers to seek their views.

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