The Ministry of Disinvestment was converted into a Department under the Ministry of Finance with effect from 27^th May 2004 and has been assigned all the work relating to disinvestment, which was earlier being handled by the Ministry of Disinvestment. Some of the important initiatives taken during the year are given below :-

The disinvestment of Government equity in Public Sector Enterprises will be carried out in accordance with the policy laid down in the National Common Minimum Programme.

Government has decided, in principle, to list large, profitable Public Sector Enterprises (PSEs) on domestic stock exchanges and to selectively sell a minority stake in listed, profitable PSEs while retaining atleast 51% of the shares alongwith full management control so as not to disturb the Public Sector character of the companies.

Government has also decided to constitute a "National Investment Fund" into which the ealization from sale of minority shareholding of the Government in profitable PSEs would be channelised. The Fund would be maintained outside the Consolidated Fund of India .The income from the Fund would be used for the following broad investment objectives: -

1. FUNCTIONS AND ORGANISATIONAL STRUCTURE

The Department of Disinvestment was set up vide Notification No. CD /551/99 dated 10.12.1999. Vide Notification No. CD-442/2001 dated 6^th September 2001, the Department of Disinvestment was renamed as Ministry of Disinvestment. The Ministry of Disinvestment was converted into a Department under the Ministry of Finance vide Notification No. CD-160/2004 dated 27^th May, 2004 and was assigned the following work :

(a) All matters relating to disinvestment of Central Government equity from Central Public Sector Undertakings.

(b) Decisions on the recommendations of Disinvestment Commission on the modalities of disinvestment, including restructuring.

(c) Implementation of disinvestment decisions, including appointment of Advisors, pricing of shares, and other terms and conditions of disinvestment.

                    (d) Disinvestment Commission.

(e) Central Public Sector Undertakings for purposes of disinvestment of Government equity only.

 

2. Consequent upon change in the policy of the Government the term of Disinvestment Commission was not extended further and it was wound up with effect from 31^st October, 2004.

3. Shri R. Poornalingam relinquished the charge of the post of the Secretary, Disinvestment on 7^th December, 2004. Shri N.S. Sisodia, Secretary(Financial Sector) took over the additional charge of Secretary(Disinvestment) and continued till his retirement on superannuation on 31.01.05. Currently Dr. Rakesh Mohan, Secretary(EA) is looking after this charge.

4. The Secretary(Disinvestment) is assisted by three Joint Secretaries. The Department functions on the Desk Officer Pattern and the disinvestment work is handled at the minimum level of Under Secretary.

5. ORGANISATIONAL STRUCTURE

DEPARTMENT OF DISINVESTMENT

The policy on disinvestment is laid down in the National Common Minimum Programme, which is given below:-

"The UPA Government is committed to a strong and effective public sector whose social objectives are met by its commercial functioning. But for this, there is need for selectivity and a strategic focus. The UPA is pledged to devolve full managerial and commercial autonomy to successful, profit-making companies operating in a competitive environment. Generally profit making companies will not be privatised.

All privatisations will be considered on a transparent and consultative case-by-case basis. The UPA will retain existing "navaratna" companies in the public sector while these companies raise resources from the capital market. While every effort will be made to modernize and restructure sick public sector companies and revive sick industry, chronically loss-making companies will either be sold-off, or closed, after all workers have got their legitimate dues and compensation. The UPA Government will induct private industry to turn around companies that have potential for revival.

The UPA Government believes that privatisation should increase competition, not decrease it. It will not support the emergence of any monopoly that only restricts competition. It also believes that there must be a direct link between privatisation and social needs – like, for example, the use of privatisation revenues for designated social sector schemes. Public sector companies and nationalised banks will be encouraged to enter the capital market to raise resources and offer new investment avenues to retail investors."

During the year 2004-05, the Government realised a sum of Rs.2,765 crore, out of which the major receipt of Rs.2,684 crore was from the sale of 43.29 crore equity shares of Rs.10 each of National Thermal Power Corporation Ltd (NTPC) out of Government of India holding. A sum of Rs 64.81 crore was realised from the sale of shares to employees of IPCL.

(i) Investment in social sector projects which promote education, health care and employment ;

(ii) Capital investment in selected profitable and revivable Public Sector Enterprises that yield adequate returns, in order to enlarge their capital base to finance expansion/diversification.

 

The Department has a full-fledged Hindi Section for handling all work relating to Official Language.

Personal computers with requisite software have been provided to all Officers and Personal Assistants. Local Area Network (LAN) has been setup and connectivity provided among all officers. Twenty-four hour internet connectivity is also available to all through NIC. E-mail ID numbers have been issued to all officers who are receiving official communications through this. The officers and staff have been receiving training at NIC from time to time.

The website of the Department (www.divest.nic.in) contains data and information(Bilingual) regarding policy, guidelines, procedure, and progress relating to the disinvestment cases. The site is updated on continuous basis. All advertisements when issued in newspapers are simultaneously placed on the website. The publications of the Department are also available on the website.

The nature of the allocated business of the Department does not create much of an interface with the public at large. Still, Joint Secretary in-charge of Administration has been nominated as Director of Public Grievances who ensures quick disposal of public grievances, if any.

During the year the Department received 28 grievances and all these cases have been resolved. All the grievances were attended to and disposed of promptly.

The initial examination and handling of Disinvestment related matters is done at the level of Under Secretary/Deputy Secretary/Director. The Personnel, Administration, Security, Common services and Vigilance matters are dealt with by a multifunctional service section. The Administration Cell which includes Vigilance is handled by one Joint Secretary. The Deputy Secretary incharge of Administration is also the Chief Vigilance Officer of the Department.

During the year no Vigilance or Disciplinary case was pending.

During the year, three audit observations pertaining to the audit of accounts of the Department for the period 1999-2002 remained unsettled. These relate to the departmental accounts and not to the disinvestment transactions. The Office of the Principal Director of Audit conducted audit of the accounts for the year 2002-03. Action would be taken on receipt of the report.