Industry & Economy
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Disinvestment
Survey for revitalisation of divestment programme
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Must generate at least Rs 25,000 cr a year.
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Our Bureau
New Delhi, July 2 Fuelling expectations that the upcoming full-fledged Union Budget will address ‘disinvestment’ in proper measure, the Economic Survey for 2008-09 has called for steps to “revitalise” the disinvestment programme and devise a plan to generate at least Rs 25,000 crore a year for the exchequer.
The Survey has also emphasised the need to complete the process of selling 5-10 per cent equity in previously identified profit making non-navratnas. In the case of unlisted public sector enterprises, the Survey has said that all such enterprises should be listed and a minimum of 10 per cent of equity be sold to the public.
Debt write-off
It has called for auction of all loss making PSUs that cannot be revived. For those in which net worth is zero, it wants to allow negative bidding in the form of debt write-off. There is, however, no specific mention about stake sale in navratnas.
With limited funds on hand and revenues under pressure, policymakers are faced with constraints and may turn to selling stakes in state-owned companies and 3G spectrum auction to raise resources during the current fiscal.
However, some of the economic policy think tanks feel that the Government should exploit the strategy of raising funds from the stock markets only in moderation.
“Raising funds by selling stakes in state-owned companies is not a sustainable strategy. A rise in initial public offerings of state –owned companies could crowd out private firms—a highly damaging effect in the current business climate of tight borrowing conditions”, says Moody’s Economy.com.
Chawla’s take
Meanwhile, the Finance Secrteary, Mr Ashok Chawla, told reporters today that it was up to the Government to take a decision on disinvestment. He highlighted that the Economic Survey had basically identified certain areas that the economic policy makers need to look at and that one such area was disinvestment.
On economic growth for 2009-10, Mr Chawla said that he expects growth to be close to 7 per cent. He also said that growth like last year will depend much on the external situation.
Related Stories:
PSU stake sale could raise Rs 45,000 cr
Govt draws up plans for ‘people ownership of PSUs’
The line-up for disinvestment
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