CPSE Value Creation Focus, Not Disinvestment: DIPAM Secy

New Delhi, Jul 25 (PTI) The focus of the government will be to improve the performance of CPSEs with a view to maximise wealth creation and not to push disinvestment just to meet targets, DIPAM Secretary Tuhin Kanta Pandey said on Thursday.

He said the market capitalisation of 77 listed public sector entities, which include banks, insurance companies and Central Public Sector Enterprises (CPSEs), has jumped 4 times in the last three years to about Rs 73 lakh crore.

In an interview with PTI, Pandey said there has been an improvement in the performance of public sector entities and markets have started valuing these entities in a much better manner. Also, LIC has contributed significantly to the total market capitalisation of CPSEs. According to the latest BSE data, LIC's market capitalisation stands at Rs 7.2 lakh crore.

There is a marked performance improvement, capex improvement, management incentives are getting aligned with the performance of CPSEs and markets are noticing it and therefore, there is a change in perception about CPSEs, he said.

"Disinvestment strategy is only supportive. It is subsumed into the asset management strategy, it is not a dominant strategy. If you have a dominant disinvestment strategy then it is a fiscal asset management strategy and not a public asset management strategy. We are seeing a shift towards value creation strategy and focus on creating wealth," Pandey said.

The government has also stopped giving any clear target for disinvestment receipts in the Budget document. It now provides the budget for capital receipts, which includes receipts from disinvestment and asset monetisation.

In the current fiscal, the government has budgeted Rs 50,000 crore from capital receipts, up from Rs 30,000 crore in the last fiscal.

The Department of Investment and Public Asset Management (DIPAM) will follow a calibrated disinvestment strategy, Pandey said, adding, "Why should we go on not trusting our stocks? We simply cannot say that this is the target, so come what may, sell the shares. That approach hasn't helped".