Govt rules out PSU stake sale

Gloom in the US & EU markets hurting investors sentiments

“...I am fully aware of the current volatile situation in the market, and surely not only me, any prudent Finance Minister would not like to dispose of valuable assets,” Mukherjee said in the Lok Sabha.

He was answering questions on disinvestment policy. The government has plans to mop up Rs 40,000 crore from selling its stake in different public sector units.

Market situation

Mukherjee said while taking decision on disinvestment, the government would keep in mind the market condition. “We cannot sell our valuable assets at a condition, at a market situation where we will not get the adequate prices,” he said, adding whole objective is to discover the latent price which is not known.The real value of a company is discovered when its is traded on stock exchanges, Mukherjee said.

Government proposes to raise an ambitious Rs 95,000 crore from sale of shares in public sector companies over next three fiscals, including Rs 40,000 crore in the current year. In 2010-11 the government could mop up little over Rs 22,000 through disinvestment against the target of Rs 40,000 crore.

Meanwhile, gloom in the US and the European markets is hurting investors’ sentiments in India in the short-term, but the country is well positioned to weather the crisis in the long  run, Mukherjee said.

The finance minister reviewed the global economic situation with Reserve Bank of India Governor D Subbarao and Prime Minister’s Economic Advisory Council Chairman C Rangarajan, in view of the panic selling in the Indian equities markets in the recent weeks.

“The effect of the market sentiments in the US and Europe has a bearing on our markets as well in the short-term,” Mukherjee said during the meeting.

Discussions among the key economic policy makers of the country were focused on the
slow economic growth in the US and debt worries in the European countries, according to an official statement released after the meeting.  The finance minister said India’s economic fundamentals were strong and the country would “emerge stronger from the present situation.”

“As the advanced economies grapple with their problems, India is better positioned than most other nations to meet its problems,” Mukherjee said.

“India has already been upgraded to market weight by some global investment banks from underweight and this is a testimony to the strength of the Indian economy,” he added.