The Hindu Business Line : Govt not to privatise profit-making PSUs

Mr N.R. Narayana Murthy, Chief Mentor, Infosys Technologies; Mr Rajendra S. Pawar, Chairman, NIIT; and Dr Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, at the India Economic Summit in the Capital on Monday. — Kamal Narang

New Delhi , Dec. 6

THE UPA Government may further dilute its stake in profit-making public sector undertakings (PSUs), but will not privatise them, the Deputy Chairman of the Planning Commission, Dr Montek Singh Ahluwalia, has said.

"I don't think you are going to see privatisation of PSUs that are profit-making. There could be further dilution of Government equity in profit-making PSUs, but the 51-per cent holding of the Government will be maintained," Dr Ahluwalia said at the India Economic Summit here on Monday.

Dr Ahluwalia was responding to a query by Mr K.S. Nargolwala, Group Executive Director, Standard Chartered Bank, Singapore, on the willingness of the Government to move out of businesses.

In response, Dr Ahluwalia noted that the "current political environment is not one where there is wide support for privatisation of PSUs." But even as privatisation of profit-making PSUs is ruled out, Dr Ahluwalia declared that there was "absolutely no hesitation" on the part of the Government to state that private sector should be allowed to expand in sectors where the public sector is already present.

The Government's stance on profit-making PSUs, he said, would not hold the country from achieving an 8-per cent growth rate.

Dr Ahluwalia said the three areas that the Government perceived as high priority ones were social sector, agriculture and infrastructure wherein a large amount of private investment must come in, since mere public funding would not be enough. In particular, improvement in human development indicators such as primary health and education - areas in which the country lags behind - is imperative for higher growth.

The Planning Commission, he said, was preparing a mid-term appraisal of the Tenth Plan to lay down a priority agenda for the Government to take up to achieve 8-per cent growth on a sustained basis. He noted that, given the country's inherent strengths, an 8-per cent GDP growth was not unrealistic, provided some corrective action is taken. He said the country would grow at 6.5-7.0 per cent in the current fiscal and achieve the targeted growth in the last year of the Plan period.

Dr Ahluwalia said that, as a part of the mid-term review, the commission would suggest certain changes in the farm policy, as otherwise it would be difficult to achieve the targeted GDP growth, in case farm growth failed to double from the current growth of 1.8 per cent.