March 15, 2002
'17-A' DISINVESTMENT NETS RS. 20261 CRORE IN 2001HI&PE CONSULTATIVE COMMITTEE MEETS
Disinvestment has been undertaken in 42 CPSEs till 2001 netting a realisation of Rs. 20,261 crore. This accounted for an aggregate disinvestment of about 16 per cent equity of the 42 CPSEs. This was stated by Shri Manohar Joshi Minister for Heavy Industries and Public Enterprises at a meeting of the Parliamentary Consultative Committee attached to his ministry yesterday. The Minister said that other than Lagan Jute Machinery Company Ltd. and Modern Food Industries Ltd., only minority stake in different PSEs was sold till 2000. With the streamlined procedure for disinvestment and privatisation, Government has now completed strategic sale in seven PSEs and some properties of the Hotel Corporation of India Ltd. and India Tourism Development Corporation Ltd. Disinvestment receipts for the year 2001-02 are estimated at Rs. 5,000 crore.
The Members were told that in case of loss making PSEs, disinvestment also offers a way for survival. It would ensure flow of financial, technological and managerial inputs through the strategic partner. In the liberalised market environment, it would also facilitate releasing the PSEs from the Government control and introduction of corporate governance in the privatised companies.
The Minister informed the Committee that the main elements of the present Government’s policy towards PSEs are:- bring down Government equity in non-strategic PSEs to 26 per cent or lower, if necessary; restructure and revive potentially viable PSEs; fully protect the interest of works; and close down PSEs which cannot be revived. The primary objectives of disinvestment/privatisation of PSEs include; releasing the large among of
public resources locked up in non-strategic PSEs, for redeployment in areas that are much higher on the social priority; stemming further outflow of these scarce public resources for sustaining the unviable non-strategic PSEs and reducing the public debt that is threatening to assume unmanageable proportions.
Shri Joshi said that his Ministry has encouraged and supported the revival plans sanctioned by BIFR in case of 12 sick PSEs by providing necessary funds. Apart from revival plans sanctioned by BIFR, Government has also approved restructuring in case of seven other PSEs providing substantial financial support for their implementation. Joint Venture formation has been undertaken in a number of PSEs with a view to provide access to technology, marketing and finance by the joint venture partner for long term sustainability of the enterprises. Some PSEs, which have been considered non-viable by BIFR/Experts Agency, have been closed and the employees of these PSEs offered VRS benefits which are much higher than the compensation available under the ID Act.
The following members of Parliament attended the meeting: S/Shri Basudev Acharya, Dinsha Z. Patel, A.M. Patel and Dr. Bikram Sarkar.