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Divestment panel asks government to sell off 20 PSUs

Disinvestment Commission Chairman G V Ramakrishna has urged the Union government to resort to strategic sales of 20-odd Public Sector Units to foreign investors as recommended by the commission to offset the possible impact of US economic sanctions.

Addressing the Madras Management Association on the effects of the Union Budget, he said the step could have been taken before the recent Moody's downgrading of India as an investment destination.

He said the budgetary proposal to disinvest 26 per cent of PSU holdings needed to be backed up by a concrete action plan to instil confidence in foreign as well as domestic investors and revive capital market activity.

The commission, he recalled, had recommended strategic sales of 40 of the 43 PSUs examined by it for disinvestment. Neither the previous United Front government nor the present BJP-led regime had acted upon it, he regretted.

He said the Union government's decision to roll back hike in petrol and urea prices might lead to a cutback to the extent of rs 40 billion, resulting in higher fiscal deficit. This coupled with inflation and low industrial growth might yield a pessimistic scenario, he cautioned.

He said the budget had several positive aspects including opening up of insurance sector, amending the urban land ceiling act and promoting Non-Resident Indian investment. It was necessary to build on these positive aspects to ensure growth, he added.

UNI