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Our Bureau

New Delhi , Aug. 2

THE Finance Minister, Mr P. Chidambaram, on Tuesday strongly defended the move toward disinvesting Government holding in public sector undertakings, and said that it was "good economics" on the part of the Centre to cash in on part of its holding in PSUs at an appropriate time.

"Monetising a part of ownership at an appropriate time and price is good economics. There can be an opposite point of view. But I would not agree that it (disinvestment) is bad economics," Mr Chidambaram said.

The Finance Minister said that enlarging the shareholding of the public in profitable Central public sector enterprises provides an opportunity for investors to invest in these units.

Making a statement to a calling attention motion on disinvestment moved by the Mr Gurudas Dasgupta and Mr S. Sudhakar Reddy (both CPI), the Finance Minister said that the Government is considering the objections of the workers' unions and others opposing the disinvestments of Bharat Heavy Electricals Ltd (BHEL).

Emphasising that the minority sale of Government's shareholding in profitable Central Public Sector Enterprises, while retaining majority ownership with the Government along with full management control was within the guidelines of the National Common Minimum Programme, Mr Chidambaram brushed aside suggestions that the disinvestment in profit-making PSU was like killing the golden goose.

The Finance Minister said that the Government has also decided that the realisation from the disinvestments of a small proportion of the Government's shareholding would be channelised into the National Investment Fund (NIF) that has a permanent corpus.

The NIF is to be professionally managed to provide sustainable returns to the Government without affecting the corpus. Income from the fund would be used to finance select social sector schemes and meet the capital investment requirements of profitable and revivable CPSEs, the Minister said.

In May, the Government decided on an `offer of sale' of 10 per cent equity in BHEL out of the Government's holding of 67.72 per cent through the book building process.

It was also decided that up to 15 per cent of the equity offered for sale will be reserved for the employees of BHEL.

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