Finance Ministry gets bigger with Dept of Public Enterprises in its fold

The whole exercise is aimed at removing operational bottlenecks due to multiple command centres and thereby imparting more efficiency and speed to decision-making.

With reorganisation of some ministries for synergy, the finance ministry will get bigger with the addition of the department of public enterprises (DPE) to it. A separate ministry for cooperation has been carved out from the ministry of agriculture and farmers welfare.

The whole exercise is aimed at removing operational bottlenecks due to multiple command centres and thereby imparting more efficiency and speed to decision-making.

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The DPE of the ministry of heavy industry and public enterprises is the sixth department in the ministry of finance, which hitherto housed the departments of economic affairs, expenditure, revenue, financial services and, investment & public asset management.

Among other mandates, the DPE coordinates matters of general policy affecting all central public sector enterprises (CPSEs), evaluates and monitors their performance and undertakes review of capital projects and expenditure in CPSEs.

Increasingly, there is a sense that the CPSEs are hamstrung by the need to report to multiple departments/ministries on operational issues. Currently, the DPE issues general guidelines for these firms, but their implementation rests with 45 different administrative ministries. If information has to be collated on how the guidelines such as closure of sick CPSEs, monetisation of assets or investment are being followed by 250-odd PSUs, one has to reach out to all administrative departments, delaying crucial policy decisions. Unlike in India, China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC) performs investor’s responsibilities, supervises and manages the state-owned enterprises.

The newly carved out ministry of cooperation will largely function as a regulator of the cooperative sector, performing similar functions like the corporate affairs ministry that oversees companies, while the agriculture ministry continues to deal with procurement and credit in which a large number of cooperatives are also involved.

According to the notification issued by the government, the new ministry will deal with general policy in the field of cooperation and coordination of cooperation activities in all sectors while other ministries concerned will be responsible for cooperatives in the respective fields.

This clears an initial confusion as to which ministry will govern fertiliser major Iffco or Gujarat Cooperative Milk Marketing Federation, popularly known as Amul; these entities will be respective administrative departments for fertilisers and dairy sectors. Similarly, the procurement of oilseeds and pulses, undertaken though agriculture cooperative Nafed, will remain with the agriculture ministry.

The ministry of cooperation will basically oversee the Central Registrar of cooperative societies that regulate and govern all multi-state cooperative societies. The step assumes significance as some of the finance companies were allegedly converted to multi-state cooperatives to evade the regulating authorities like the RBI and Sebi.

A separate ministry will definitely help as the cooperative never got importance in the agriculture ministry that it deserved and there were than 10 staff working in the cooperative division, a senior official said. Besides, it will also handle the affairs of the National Cooperative Development Corporation, which normally funds cooperatives to undertake government schemes.

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