JOIN USBudget will pursue PSU disinvestment, hints PM
“Issues like fiscal prudence and disinvestment of public sector units will be tackled by the finance minister in the (forthcoming) budget,” he told repoters. He said efforts would be made to ensure growth momentum of the economy keeping fiscal prudence in mind.
He also made it clear that economic growth would not come at the cost of fiscal prudence. Asked about the PSU disinvestment agenda Finance Minister Pranab Mukherjee evaded the query saying the government should not be cross-examined on its future reform measures. Analysts say Prime Minister’s hint about his government pursuing disinvestment of government stake in PSUs bolsters growing expectation that the newly elected Congress-led UPA regime would push forward the much-needed reform.
Key feature
Disinvestment of government stake in PSUs is usually considered as a key feature of economic reform process. However, it is learnt that the Disinvestment Department is working on disinvestment of government equities in PSUs like Bharat Sanchar Nigam Limited (BSNL) and the railway consultancy firm Indian Railway Construction Company (IRCON).
The government has already cleared the disinvestment of power major NHPC and Oil India Limited. However, it could not go ahead because of depressed market conditions. Fund mobilisation by the government by way of initial public offers (IPOs) declined in 2008.
There was only one public sector undertaking IPO, which was that of Rural Electrification Corporation, worth Rs 1,421 crore. In 2007, there were four public sector undertaking IPOs, including those of Power Grid Corporation and Power Finance Corporation,worth Rs 5,580 crore.