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Govt yet to heed Disinvestment Commission's advice

The Union government is yet to implement some of the Disinvestment Commission's general recommendations such as the setting up of disinvestment fund and a pre-investigation board to make the disinvestment of public sector enterprises more meaningful, commission Chairman G V Ramakrishna said on Wednesday.

Delivering the G R Sarma Memorial Lecture on the 'Future of Indian Public Sector' at the Centre for Technology Development in Madras, he said the commission had, in its first report in February last year, stated that all the recommendations should be implemented in totality as they were interlinked with each other instead of dealing with them on piecemeal basis.

He said setting up of the Disinvestment Fund, in which all the proceeds from the disinvestment process could be pooled, could help take up various steps to improve the functioning of the public sector enterprises (PSEs).

They included apportioning a part of the funds for the voluntary retirement scheme under which surplus PSEs employees who amount to nearly 500,000 could be provided pension-cum-insurance scheme and meeting the cost of social infrastructure in rural areas.

At present, disinvestment accruals (estimated at Rs 70 billion this year) was being added to the general revenue side.

Ramakrishna said the creation of the fund would result in long-term benefits, besides leading to the creation of new assets.

He said setting up of the pension-linked insurance scheme would enable the PSEs to thrive and instill confidence among trade unions as 75 per cent of the employees would gain long-term employment.

Ramakrishna said the Union government had failed to do its job as a trustee of the tax-payers money by effectively managing the PSEs. Even in dealing with the recommendations of the commission, it had not implemented them with desired pace.

He said the government had recently accepted and set in motion the offering of block shares ranging between 30 and 40 per cent in nine PSEs to strategic partners both within and outside the country.

The necessary procedure for global bidding was being framed. The companies included ITDC, Modern Foods, Bharat Aluminium, Kudremukh, Madras Fertilisers Limited and Bongaigaon refineries.

Apart from the chunk of shares, the management would also be transferred to the private units so that the value of remaining shares held by the government could appreciate.

Ramakrishna stressed the need for immediately setting up a pre-investigation board to go into irregularities and scams in the PSEs.

This would instill confidence among PSEs managers. Autonomy without protection to commercial decisions made by these managers would not yield the desired results, he added.

He said the commission, which had already covered 19 of the 40 companies referred to it, would come out with the fifth report early next month.

UNI