Financial Daily from THE HINDU group of publications
Wednesday, Aug 17, 2005
Industry & Economy - Disinvestment
No strategic sale in profit-making PSUs, says Chidambaram
New Delhi , Aug. 16
THE Government is to consider some other form for divesting its stake in profit making central public sector enterprises (CPSEs) instead of strategic sale of equity.
The Finance Minister, Mr P. Chidambaram, informed Parliament on Tuesday that the Government has decided to formally call off the divestment of stake through strategic sale in 13 profit-making CPSEs.
"In keeping with the National Common Minimum Programme guidelines, it has been decided to formally call off the divestment process through strategic sale in the case of 13 profitable CPSEs," Mr Chidambaram said.
They are Manganese Ore India Ltd, Sponge Iron India Ltd, Shipping Corporation of India Ltd, National Building Construction Corporation Ltd, National Fertilisers Ltd, Rashtriya Chemicals and Fertilisers Ltd, Hindustan Petroleum Corporation Ltd, Engineers India Ltd, Balmer and Lawrie and Company Ltd, Engineering Projects India Ltd, Hindustan Paper Corporation Ltd and State Trading Corporation of India Ltd.
Later, Mr Chidambaram told newspersons that strategic sale is not a transparent method. "I believe that strategic sale is no longer the proper approach to adopt. It raises more questions and is not the preferred route,'' the Finance Minister said.
The Government, instead, is considering the public offer route to sell minority stakes in CPSEs. "This is what is being discussed. There are sale and purchase agreements and obligations. We will deal with each case according to the legal obligations contained in that agreement," Mr Chidambaram said.
`Sick PSUs must be wound up': Mr Chidambaram said sick public sector companies must be wound up. "Totally sick companies are a drain on resources. They have to be wound up," Mr Chidambaram said, winding up the discussion on supplementary demands for grants of Rs 14,661 crore, with cash outgo of Rs 6,818 crore for the current fiscal.
The Rajya Sabha approved supplementary demands by a voice vote. The Lok Sabha had earlier passed the demand.
Mr Chidambaram said the Government had twice given grant to sick companies to pay dues of their employees but this could not continue.
The Finance Minister said the economy was set for higher growth compared to last year. "Last year agriculture did not perform well but the industry and services did well. This year, of the 39 meteorological divisions, 31 have reported normal to excess rainfall and there are two more weeks of North West monsoons to go," he said.
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