The government's intention to from divest public sector enterprises is to strengthen them, finance minister Nirmala Sitharaman said at the inaugural function of the 'Creating wealth through markets' conference in Bengaluru.
"Disinvestment is now helping companies give better equity returns, better profits for shareholders, and the gross profits of these companies have improved. Nature of work of Department of Investment and Public Asset Management (DIPAM) is to ensure better working of public sector companies. We are not thinking of shutting down any company just because they are being disinvested. If we divest a steel company it is because the country needs more steel production and better functionality of the company", Sitharaman said.
She added that through the bond market route DIPAM is putting rated companies as exchange traded funds. "Central Public Sector Enterprises (CPSEs) are getting into the ETF segment. DIPAM is there to also make a deeper presence in the bond market", the finance minister said.
The DIPAM, part of the union finance ministry, is a key stakeholder in divesting public assets like LIC.