Under the newly proposed Union Budget 2023 the Union Ministry has proposed to modify the definition of ‘strategic disinvestment’.
Strategic disinvestment would imply the sale of substantial portion of the Government shareholding of a central public sector enterprise (CPSE) of up to 50%, or such higher percentage as the competent authority may determine, along with transfer of management control.
Through Budget 2023, facilitate certain strategic disinvestments. To facilitate certain strategic disinvestments, it is proposed to allow carry forward of accumulated losses and unabsorbed depreciation allowance in the case of amalgamation of one or more banking company with any other banking institution or a company subsequent to a strategic disinvestment, if such amalgamation takes place within 5 years of strategic disinvestment.
This is one of the major socio-economic welfare steps taken by the ministry.
Strategic divestment means the sale of a public sector undertaking to the non-government entity and in most cases to a private sector. It is done so by the government in order to relieve itself of the burden of maintaining a non-performing public enterprise. Its major objective is to meet the budgetary requirements and to reduce fiscal burden and also to improve the market competitiveness and discipline.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
