New Delhi, Feb. 27: The government has raised just Rs 3,342 crore through selloff proceeds till January — far short of the Rs 12,000 crore it had budgeted for at the start of this fiscal.
The shortfall was the result of lack of consensus on the selloff process. However, on the bright side, the government did finally manage to bring the big-ticket companies — Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd — on the fast track.
The Economic Survey said disinvestment did not mean doom for the workers and tried to allay their fears. It said privatisation would help improve efficiency and productivity.
The Survey said that the deficit in the selloff target should be viewed in the context of the need to develop a consensus around the key issues. “Policies on privatisation are an important component of the policies for efficiency and productivity,” it said.
The aggregate balance sheet of all public sector companies amounts to roughly Rs 22 lakh crore. Hence, the Survey says, ‘relatively modest improvement in the efficiency of their functioning would have a significant impact upon GDP growth.’
Noting the trend of a shift in privatisation from the sale of minority to strategic sales from 1999-2000 onwards, the Survey says that through the decade of 1990s there has been an increasing consensus on the merits of privatisation.
The Survey points out that while the public sector undertakings had seen a net reduction in employment from 2,179 million employees in 1991-92 to 1,742 million in 2000-01, in comparison the retrenchment of employees after disinvestment had been marginal.
In eight of the disinvested PSUs and five disinvested ITDC hotels, against an initial employee strength of 27,967 at the time of disinvestment, 2,119 employees were retrenched through VRS and another 910 for other reasons, the Survey said.