Throughout 2018-19, there have been 4 transactions involving the sale of Rural Electrification Company to PFC, Dredging Company to port trusts, Nationwide Tasks Development Firm to WAPCOS Company and HSCC (India) to NBCC.
“Such disinvestments only resulted in transfer of resources already with the public sector to the government and did not lead to any change in stake of the public sector/government in disinvested PSUs,” the auditor mentioned in a report tabled in Parliament. These “strategic disinvestments” had generated over a fifth of the disinvestment receipts of Rs 72,620 crore in the course of the yr.
Within the earlier yr, the federal government had bought oil advertising firm HPCL to ONGC. With the Centre’s strategic sale programme proving to be a non-starter, the division of funding and public asset administration (DIPAM) has resorted to promoting one PSU to a different, whereas failing to eliminate the majority of the ailing firms cleared on the market by the Union Cupboard.
Equally, the sale of shares held by SUUTI, the entity created to take over shares held by the erstwhile UTI, has additionally come beneath the scanner because it was handled as disinvestment receipts.
CAG has argued that neither SUUTI, nor the belongings and liabilities are depicted within the Centre’s accounts. Throughout 2018-19, SUUTI had bought part of shares held by it and transferred proceeds estimated at Rs 12,426 crore to the federal government.
The auditor has taken to the classification as nature of “miscellaneous capital receipts”, saying it’s “incorrect”, since SUUTI is just not a authorities entity, and receipts from sale of shares, can solely be handled as non-tax income and never capital receipts.
“As a result of the incorrect classification, the capital receipts of government for the year were overstated and revenue receipts understated, with corresponding impact on the revenue surplus,” it mentioned.
A number of consultants have questioned the rationale to indicate these gross sales as disinvestment receipts, with the Centre at one level classifying SUUTI share gross sales as “strategic sales” on the DIPAM web site.