Disinvestment in central public sector undertakings (PSUs) is now firmly on the UPA Government’s agenda.
The Finance Ministry has initiated discussions with other ministries and departments for identifying the PSUs where a portion of Government shareholding can be sold, the Union Finance Minister, Mr Pranab Mukherjee, told the Lok Sabha on Tuesday.
This in effect demolishes criticism in certain quarters that the Finance Minister had remained silent and not laid out a roadmap for disinvestment in his Budget speech. The silence on disinvestment and the projected huge increase in government borrowings had disappointed the stock market on the Budget day.
Mr Mukherjee has now broken that silence and elaborated on divestment (without using this word) in his reply to the discussions on the Union Budget for 2009-10 in the Lok Sabha.
1Fresh equity
Besides identifying disinvestment candidates, the Finance Ministry was also in talks for issue of fresh equity by PSUs to meet their fund requirements, Mr Mukherjee said.
“It is our intention to enable the PSUs to benefit from techno-managerial efficiencies and become more competitive in the market. The fund requirements of PSUs are for modernisation and technological upgradation,” Mr Mukherjee said.
Indications are that for disinvestment purposes, the Government may in certain cases piggy-back on the fresh equity offerings of certain PSUs.
For 2009-10, the Government has pegged the revenue estimates from disinvestment at Rs 1,120 crore, lower than the Rs 1,165 crore garnered in 2008-09.
For 2009-10, the Government proposes to disinvest a small portion of equity in Rail India Technical and Economic Services Ltd, Cochin Shipyard, Telecommunications Consultants India Ltd, Manganese Core India Ltd, Rashtriya Ispat Nigam Ltd and Satluj Jal Vidyut Nigam Ltd.
The Finance Minister highlighted that the President, Ms Pratibha Patil’s address to the joint session of Parliament on June 4 had clearly spelt out the policy of the Government on disinvestment.
High govt borrowing
The Finance Minister also used the occasion to reassure that the private sector will not be elbowed out of the market due to the increased government borrowings in 2009-10.
The actual net borrowing through Government securities in 2008-09 was Rs 2,21,472 crore. The net market borrowing requirement for 2009-10 through dated securities of Government works out to Rs 3,97,957 crore.
The Finance Minister highlighted that in the first half of 2009-10 the Government market borrowing of Rs 2,41,000 crore of dated securities was being supported by the Reserve Bank of India through its Open Market Operations (OMO). “The Government has no intentions of monetising its debt,” he said.
With today’s reply, the first stage of passage of the Budget has been completed.
Source: The Hindu Businessline