Sale of PSU to other PSU not disinvestment, observes CAG

The strategic sale of four public sector units to other public sector entities in 2018-19 by the Central government has been sharply criticised by the Comptroller and Auditor General (CAG) of India in an audit, tabled in Parliament.

“Such disinvestments only resulted in transfer of resources already with the public sector to the government and did not lead to any change in the stake of the public sector / government in the disinvested PSU,” the CAG noted, indicating its displeasure at such transactions.

It may be recalled that the Centre had earlier sold oil major HPCL to another PSU ONGC and resorted to similar transactions in order to meet disinvestment targets in recent years.

In 2018-19, the government raised ₹72,620 crore from disinvestment, which included the strategic sales of the Rural Electrification Corporation, Dredging Corporation(DCI), HSCC (India) and National Projects Construction Corporation. While REC was sold to Power Finance Corporation, DCI was sold to a consortium of Port Trusts.

The CAG also criticised the Centre’s claim as disinvestment receipts of almost ₹12,500 crore from the sale of shares by the Specified Undertaking of the Unit Trust of India (SUUTI), an entity created to deal with the erstwhile UTI’s assets and liabilities.

“Neither SUUTI nor its assets, liabilities are depicted in the Union Government Finance Accounts,” the CAG noted, adding receipts from it were wrongly booked as capital receipts.

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