DIPAM Current Affairs - 2019

Department of Investment and public Asset Management (DIPAM) is the nodal agency of Union Finance Ministry mandated to advise the Union Government in the matters of financial restructuring of PSUs and also for attracting investment through capital markets.

Category Wise PDF Compilations available at This Link

Cabinet approves new strategic disinvestment process

On 4th October, 2019, Cabinet approved new process of strategic disinvestment to privatize selected PSUs – Public Sector Units. The process was approved by PM Modi under which DIPAM – Department of Investment and Public Asset Management operating under Ministry of Finance will be the nodal agency to implement the process.

The PSUs to be put under sale will be identified by NITI Aayog along with DIPAM.

The Finance Minister Nirmala Seetharaman announced during the Budget that the divestment target from 90,000 crore rupees will be increased to 1.05 lakh crore rupees.

Divestment history of India – Major events

When the government sells its share of PSU to a private sector or an individual it is called divestment.

The divestment process in India began in 1991 when 20% of selected PSUs were announced to be divested in the interim budget. In 1993, it was increased to 49%. However, this was not implemented.

In 1996, GV Ramakrishna Committee was formed to make suggestions about the divestment process.

Between 1998 and 2000 under Vajpayee Government several divestment processes were included

  • The PSUs were divided into strategic and non – strategic. Strategic included railway, arms – ammunition, energy, etc. Non – strategic included others that were not part of the above category.
  • Department of Disinvestment was set up under Ministry of Finance to complete the projects successfully.

NIIF – National Investment Fund

The money earned by the government through the disinvestment policy will be deposited in NIIF. It does not go into the Consolidated funds of India. It is managed by UTI, SBI and LIC.

The money from the NIIF can be used to execute government schemes and reviving or expanding other PSUs. The rule is that 75% of the money should be used for government schemes and 25% for reviving PSUs

Guidelines for Monetisation of Non-Core Assets of CPSEs

The Department of Investment and Public Asset Management (DIPAM) has issued the guidelines for monetisation of non-core assets of Central Public Sector Enterprises (CPSEs) and immovable enemy properties.

Guidelines for Monetisation of Non-Core Assets

  • An inter-ministerial group chaired by the secretary of DIPAM will identify the non-core assets of the CPSEs on its own and also on the basis of recommendations of the Niti Aayog.
  • The final call will be taken by the Finance minister-headed panel.
  • Once the panel approves the assets for monetisation, it should be completed within 12 months from the date of approval, failing which the finance ministry may restrict budgetary allocations to the CPSEs.
  • CPSEs can also seek relaxation from the inter-ministerial group of the 12-month deadline for sale of non-core assets.
  • In case of immovable enemy properties, the guidelines said that the assets would be identified for disposal in consultation with the stakeholders including the respective state governments.

The amount raised through the sale of non-core assets would form part of the disinvestment proceeds. The government has set a target of Rs 90,000 crore to be raised through CPSE disinvestment in the current financial year.