Centre announces new Public Sector Enterprises policy, most sectors to be open to privates

Finance Minister Nirmala Sitharaman, announcing the final tranche of Rs 20 lakh crore stimulus package on Sunday, said that a new Aatmanirbhar Bharat will stand on a new Public Sector Enterprise Policy. FM Sitharaman announced that all sectors are open to the private sector while public sector enterprises will play an important role in defined areas.

'In other sectors, PSEs will be privatised'

She said that in strategic sectors, at least one enterprise will remain in the public sector but the private sector will also be allowed. In other public sector enterprises (PSEs), privatization will be allowed. To minimize wasteful administrative costs, the number of enterprises in strategic sectors will be between one to four, others will be privatised or merged or brought under holding companies. 

The final tranche of measures announced by the Finance Minister includes 7 measures, also focusing on technology-driven education, Insolvency and Bankruptcy proceedings, and others.

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Here are the other announcements:

• Mahatma Gandhi National Rural Employment Gurantee Act (MNREGA): The government will now allocate an additional Rs 40000 crore under MNREGA. 

• Health - rural and urban areas including education: The government announced that the public expenditure on health will be increased. Infectious diseases hospital blocks will be built in all districts. Steps will be taken to implement the National Digital Health Blueprint. Steps will also be taken to strengthen lab network, surveillance and research.

• Education: The FM announced that there will be one nation, one digital platform under PM e-Vidya programme and there will be one class, one channel from Class 1 to Class 12. The FM also said that there will be extensive use of community radio and there will be special e-content for visually and hearing-impaired students. Top 100 universities will be permitted to start online courses by may 30.

• Business and Covid 19: In a major step to insulate the MSMEs, the FM announced that minimum threshold to initiate insolvency proceeding will be one crore. She said that the special insolvency resolution framework will be set for MSMEs under Section 240A. Furthermore, the FM said that the Central government will have the power to exclude COVID 19 related debt from definition of 'default' under the Code. 

• Decriminalistaion of Companies Act: The FM announced that the Centre will amend the companies act under which 7 compoundable offences will be dropped and 5 will be dealt with alternative framework. She added that the 58 compoundable offences sections will be dealt by the internal adjudication mechanism (IAM), while earlier only 18 were dealt by the same. 

• Ease of doing business and related issues: The FM announced that direct listing of securities will be permissible to Indian public companies. She also said that penalities for all defaults for small companies, one-person companies, producer companies & start-ups has been lowered.

• State governments & related resources: The Centre announced that the borrowing limits of the States have been increased from 3% to 5% for 2020-2021. 

Initiatives and reforms announced by FM earlier

The Finance Minister on Saturday said that the central government will introduce competition, transparency and private sector participation in the coal sector and will do infrastructure development of Rs 50,000 crore.

Earlier on Friday, FM Sitharaman announced Rs 1 lakh crore Agri Infrastructure Fund for farm gate infrastructure for farmers and Rs 10,000 crore scheme for the formalisation of Micro Food Enterprises (MFEs) under the Rs 20 lakh crore stimulus package. She also proposed amendments to the Essential Commodities Act to enable better price realisation for farmers and said no stock limit should apply to processors or value chain participants.

On Thursday, the Finance Minister announced the 'One Nation One Ration Card', free food grain supply to migrants and creation of affordable rental housing complexes (ARHC) in urban areas for migrant workers and poor under the COVID-19 stimulus package. The announcements came after the Prime Minister on Tuesday announced the economic package for the country to become 'self-reliant' and deal with COVID-19 crisis.

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(With agency inputs)