New Delhi, Jan. 7 (PTI): The Federation of Indian Chambers of Commerce and Industry (Ficci) today suggested that the government should refrain from privatising PSUs through sale of equity to an individual or a company and should instead opt for the public offer route in India and abroad.
“Not only this will prevent monopoly but also help get better value for equity through a float on overseas exchanges like the Nasdaq,” new Ficci president A. C. Muthiah said here today.
Citing coalition politics as a major stumbling block in the disinvestment process, Muthiah said by disinvesting its stake through a public offer, the government could still attain the objective of privatising PSUs, that too by obtaining better realisation for its stake.
There was no need to hand over the highly profit-making public sector units particularly in the oil sector, like Hindustan Petroleum and Bharat Petroleum, to an individual or company as it could lead to monopolies, Muthiah said.
Citing the example of China that raised $ 20 billion from the Nasdaq as apart of its privatisation, Muthiah said adopting such a method would fetch better value for the government.
“Instead of an outright sale, the government can dilute up to a 40 per cent stake by going public,” he said.
Making a case for allowing public sector undertakings to participate in the disinvestment process, he said, “allowing PSUs to bid is not anti-privatisation”.
Ficci also sought a lenders’ liability law to protect rights of borrowers who are not wilful defaulters. It suggested a review of the new Securitisation Act for tackling non-performing assets of banks and FIs, which it said was tilted in favour of lenders and was against borrowers who were already reeling under pressures of high interests amidst threat of cheaper imports.
“There should also be a lenders’ liability law with it,” Muthiah said, while cautioning that a selective approach to resolve NPAs was not proper.