Govt calls off BPCL’s strategic disinvestment

Tags: Economy/Finance

The Government has decided to end the current Expression of Interest (EoI) process for strategic disinvestment of Bharat Petroleum Corporation Limited, BPCL.

• The Department of Investment and Public Asset Management (DIPAM) said that the multiple wave of COVID-19 and geopolitical conditions affected several industries globally, especially the oil and gas industry.

• DIPAM said that most of the Qualified Interested Parties (QIPs) expressed their inability to continue the current process due to the prevailing conditions in the global energy market.

• The transition to green and renewable fuels has made privatisation difficult in the current context.

• DIPAM had issued a Global Invitation in March, 2020 for expression of interest for strategic disinvestment of approximately 53 per cent equity share capital of the Government in Bharat Petroleum Corporation Limited.

• What Is Disinvestment?

• Disinvestment means selling a stake in a company, subsidiary or other investments.

• Governments often sell stakes in public sector companies to raise revenue.

• In the early 1990s, in the wake of changes in economic policy, the Indian government began disinvestment of its stake in public sector companies.

• This is commonly known as liberalisation, privatisation and globalisation.

• The NDA government in its first term under Prime Minister Atal Bihari Vajpayee undertook strategic disinvestment in major PSBs such as Bharat Aluminium Company (Balco) and Hindustan Zinc (Sterlite Industries), Indian Petrochemicals Corporation Limited (for Reliance Industries) and VSNL (for Tata).

• Department of Investment and Public Asset Management (DIPAM)

• It was set up under the Union Ministry of Finance on December 10, 1999. 

• It was established to manage the disinvestment work of the Central Government in Public Sector Undertakings.

• The Department of Disinvestment was renamed as 'Department of Investment and Public Asset Management (DIPAM)' on April 14, 2016.