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Informist, Monday, Feb. 24, 2025

 

By Sagar Sen

 

NEW DELHI – The finance ministry is considering merging the Department of Investment and Public Asset Management and the Department of Public Enterprises under the ministry, a senior ministry official said. While the Department of Investment and Public Asset Management, or DIPAM, manages investments in equity including disinvestment of equity in public sector undertakings, the Department of Public Enterprises formulate policies and guidelines for the functioning and performance of public sector enterprises in India.

 

A final decision on the merger may take some time as other ministries and the Prime Minister's Office need to approve the move, the official said. "The government believes that by merging the two departments there will be greater synergies. This will also help PSUs to chalk out their plans with greater certainty," the official told Informist.

 

According to the official, merging the two departments would enable state-owned companies to receive more comprehensive feedback about their performance and future goals.

 

Interestingly, the government has not appointed anyone to head the Department of Public Enterprises since July 31, when former secretary Ali Raza Rizvi demitted office. Since August, the Department of Investment and Public Asset Management secretary has been holding additional charge of the Department of Public Enterprises. This has further fueled internal speculation of merging the two departments, the official said.

 

Since the Interim Budget for 2024-25 (Apr-Mar), the government has discontinued the practice of giving a specific target for divestment receipts. The government had said keeping a fixed divestment target was difficult due to market volatility. For FY26, the government set a target of INR 470 billion from divestment of its stake in public sector undertakings and asset monetisation.

 

The Department of Investment and Public Asset Management manages the government's equity in central public sector undertakings. The department is responsible for capital restructuring of PSUs and stake sales through strategic disinvestment, privatisation and minority stake sale. It was set up as a separate department in 1999 and was later made a separate ministry in 2001. Since 2004, the disinvestment department has been under the finance ministry. The department was renamed the Department of Investment and Public Asset Management in April 2016.

 

The Department of Public Enterprises also sets the performance parameters for PSUs through memoranda of understanding between the companies and their administrative ministries. The National Land Monetization Corp. under the department handles the monetisation of non-core assets of the PSUs. The government established the Bureau of Public Enterprises in 1965 under the Ministry of Finance. But in 1985, the bureau became a part of the Ministry of Industry. In 1990, it was turned into a full-fledged department.  End

 

Edited by Saji George Titus

 

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