Hyderabad: On Monday (November 16), the Department of Investment and Public Asset Management (DIPAM) signed an agreement with the World Bank for providing advisory services on assets monetisation. While the central government’s move is in the direction of fast-tracking its privatisation goals, trade unions and observers argue that the World Bank’s priorities will not be in the interests of India.
DIPAM is mandated with facilitating monetisation of non-core assets of Central Public Sector Undertakings (CPSEs) under strategic disinvestment or closure and enemy property of value of Rs 100 crore and above.
The World Bank advisory project, approved by the Finance Minister, “is aimed at analysing public asset monetisation in India and benchmarking its institutional and business models against international best practices as well as supporting development of operational guidelines and capacity building for their implementation,” states a press release by the Ministry of Finance.
Enemy property refers to the properties and companies taken over by the Centre during migration of people from India to Pakistan amid India-Pakistan wars of 1965 and 1971, as per the Defence of India Rules framed under The Defence of India Act, 1962.
Commenting on the agreement, Tapan Sen, general secretary of the Centre of Indian Trade Unions (CITU) said that it is quite natural for DIPAM to align with the World Bank for advisory services for its privatisation goals but even if privatisation is concerned, “in its advisories, the World Bank will have its own priorities than the interests of India.”
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DIPAM has been on a spree of divestment of public entities for the last six years in spite of large scale movements by central government employees and well performance by many CPSUs.
On Monday, DIPAM under the Finance Ministry invited bids for the engagement of actuarial firms for arriving at the embedded value of Life Insurance Corporation of India (LIC) ahead of its proposed Initial Public Offering (IPO).
The department is also speeding the process of strategic divestment of Bharat Petroleum Corporation Limited (BPCL) in which the government holds 53% stake amounting about Rs 48,000 crore at current market prices.
In its union Budget of 2020-21, the Bharatiya Janata Party-led government has set a divestment target of Rs 2.1 lakh crore including Rs 1.2 lakh crore divestment from public entities.
During the financial year 2019-20, DIPAM divested government held stakes in 16 public entities and received receipts amounting to Rs 50,298.64 crore. From 2014 to 2019, the amount received through divestment was Rs 2,79,671.17 crore.
“When it is the crucial time for the government to rethink its plans on privatisation, it is joining hands with the World Bank to fast track the process,” said M G Devasahayam, retired IAS officer.
He said that the World Bank’s advisories will be favourable to the large corporate giants and against the interests of the poorer sections of the people.