Recently, the Ministry of Finance has extended the bidding deadlines for the strategic disinvestment of Pawan Hans by a month, citing logistical challenges faced by interested bidders due to the Covid-19 pandemic.

  • Pawan Hans Limited is a helicopter service company based in New Delhi. It is a Mini Ratna-I category Public Sector Undertaking.

Key Points

  • Background:
    • Government’s Disinvestment Target for 2020-2021: Government plans to raise Rs. 2.1 lakh crore through disinvestment in 2020-21, with just about Rs. 14,000 crore raised so far through minority stake sales.
    • New Public Sector Policy: As part of the ‘Aatmanirbhar Bharat Abhiyan’ package, the government in May 2020 had announced that there will be a maximum of four public sector companies in the strategic sectors, and state-owned firms in other segments will eventually be privatised.
      • Under the policy, a list of strategic sectors will be notified where there will be at least one and a maximum of four public sector enterprises, apart from private sector companies.
      • In other sectors, central public sector enterprises (CPSEs) will be privatised, depending on the feasibility.
  • Current Situation:
    • The Bidding deadline for the disinvestment of Pawan Hans has been extended by a month.
    • Strategic sales of public sector firms like Air India and Bharat Petroleum Corporation Limited (BPCL) are unlikely to conclude this year.
    • Further amendments are needed to the LIC Act of 1986 to list the Life Insurance Corporation of India on the markets.
  • Need for Disinvestment Proceeds:
    • There is a pressure on the government to raise resources to support the economic recovery and meet expectations of higher outlays for healthcare.
    • The increase in public spending in the upcoming Budget will have to be financed to a large extent by garnering disinvestment proceeds and monetising assets.
    • To eliminate the need for the government’s involvement in non-strategic areas.

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