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Govt weighs divestment in profit-making PSUs List excludes Navratnas, says Chidambaram

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Mr P. Chidambaram, Union Finance Minister, at the Financial Times and International Finance Corporation (FT-IFC) seminar in Mumbai on Wednesday. Shashi Ashiwal
Mr P. Chidambaram, Union Finance Minister, at the Financial Times and International Finance Corporation (FT-IFC) seminar in Mumbai on Wednesday. Shashi Ashiwal

Our Bureau

Mumbai, Nov. 9

NOTWITHSTANDING the Left parties' objections, the Government appears to be hopeful of selling shares in some public sector undertakings.

The Finance Minister, Mr P. Chidambaram, said on Wednesday that the Government is considering disinvestments of small portion of equity in select profit-making public sector undertakings other than the Navratnas.

Mr Chidambaram was talking to newspersons at the sidelines of a seminar on Southern Multinationals. The Minister did not give any other details, including the names of PSUs or the time frame for the proposed disinvestment.

Though his words had some impact on the local bourses, most market players were concerned about the Left's reaction. They were sceptical whether the Government could cross this stumbling block.

Some of the PSU stocks that have appreciated in today's trading include Bharat Earth Movers Ltd (up 4.80 per cent at Rs 882.60 on BSE), Bharat Electronics (up 2.46 per cent at Rs 795.15), Hindustan Organic Chemicals (up five per cent at Rs 34.70) and MTNL (up 2.34 per cent). If the Government goes ahead with its plan, it would help in increasing the floating stock of these PSUs, which in turn would give a boost to their price. Responding to a query on inflation, Mr Chidambaram said the average inflation is likely to be around five per cent and that is unavoidable. The pass through of fuel prices would impact inflation, as fuel prices form 60 per cent of inflation. On the trade deficit, he said, the trend shows more capital goods are being imported, which is good.

Asked about the recent fall in the value of the rupee against dollar, he said the movement in the currency is orderly and, therefore, there is no cause for concern. "The rupee has appreciated against the yen, euro and pound and only depreciated against the dollar," he added. Earlier, in his speech at the seminar organised jointly by IFC and FT, the Finance Minister expressed concern about the barriers on movement of workforce, which the developing countries should address.

(This article was published in the Business Line print edition dated November 10, 2005)
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