Financial Daily from THE HINDU group of publications
Monday, Feb 10, 2003
Financial Daily from THE HINDU group of publications Monday, Feb 10, 2003 |
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Industry & Economy
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Disinvestment Formulate medium term sell-off policy: Chamber Our Bureau
NEW DELHI, Feb. 9 THE PHD Chamber of Commerce (PHDCCI) has sought the formulation of a medium-term disinvestment policy over a period of three to five years. In a study conducted by the Chamber on the disinvestment policy, it has stated that that the companies in the performing and non-performing sectors should be identified at the earliest before the disinvestment exercise is embarked upon and issues such as timing, mode and proportion of equity to be disinvested should be clearly worked out. "The clarity of vision has also to be backed by tenacity on the part of the Government. This is very much essential as it is being increasingly recognised that disinvestment is a complex operation where there are a number of intricacies involved. The proliferation of vested interests in the area needs to be tackled in order to make disinvestment possible," says the study. The study states that the management and responsibility of the entire disinvestment process should exclusively be with the Disinvestment Ministry. "Setting up of such a Ministry ensures transparency and fairness and also contributes to a comprehensive approach to disinvestment, as opposed to ad hoc decisions." The study also states that the candidates for disinvestment must be chosen carefully and the stronger PSUs are the ones that must enter the market first in the short run. In the medium term, however, all Government companies that are non-strategic should be candidates for disinvestment. It says that in every other case there is no reason why the Government equity should not be brought down to 26 per cent and this includes banking, insurance, aviation, petroleum sector and tourism. The study states that there has to be a proper competition policy to cover unfair and restrictive trade practices and issues like transfer pricing.
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