Government to exit 23 CPSEs

Government has given ‘in-principle’ approval for strategic disinvestment of 23 central public sector enterprises (CPSEs) including subsidiaries, units and joint ventures, said minister of state for finance Anurag Thakur.

In reply to a question in Lok Sabha, Thakur stated that firms include Project & Development India Ltd., Hindustan Prefab Limited (HPL), Engineering Project (India) Ltd., Bridge and Roof Co. India Ltd, Pawan Hans Ltd., Air India and its five subsidiaries and one JV, among others.

“During the last two years, strategic disinvestment of 5 CPSEs (HPCL, REC, NPCC, HSCC and DCIL) has been successfully completed. Profitability is not a criterion for strategic disinvestment,” he said adding that Strategic disinvestment has been guided by the basic economic principle that the government should not be in the business to engage itself in sectors where competitive markets have come of age.


BAD LOANS IN PSBs
Withdrawal of Development Financial Institutions (DFIs) from financing high-value core industry and infrastructure project finance, is a a key reason for higher bad loans in state run banks, said minister of state for finance Anurag Thakur.

“Since such financing is based on future cash flows that are generated only after project commissioning and repayment is spread over a long period, higher risk is inherent,” said Thakur in replay to a question in Lok Sabha adding that higher level of NPAs and relative weakness in financial performance indicators is a reflection of the greater share of PSBs in such lending.

“To strengthen and improve the performance of PSBs, Government has taken comprehensive steps under its 4R’s strategy that comprises recognising NPAs transparently, recapitalising PSBs and reforming banks through the PSB Reforms Agenda,” he stated, adding that over the last four financial years, PSBs were recapitalised to the extent of Rs. 3.12 lakh crore, with infusion of Rs. 2.46 lakh crore by the government and mobilisation of over Rs. 0.66 lakh crore by PSBs themselves.

Gross NPAs of commercial banks and PSBs have since declined by Rs 1.02 lakh crore and Rs 1.06 lkah crore respectively to Rs 9.33 lakh crore and Rs 7.89 lakh crore respectively as on Mrach 2019, he stated in his reply.

BANK BRANCHES
In answer to a separate question, Thakur said that the total number of bank branches of commercial banks across the country as March 2019 was 1,46 lakh out of which 51,653 bank branches (35.15%) are in rural areas. Further, the number of rural branches of Scheduled Commercial Banks (SCBs) has increased from 41,823 in March 2014 to 51,653 in March, 2019, he stated adding that 42,583 ATMs as on March, 2019 are providing banking services in rural areas.