New Delhi, June 17: The finance ministry has sent a note to all ministries seeking marginal divestment in profit-making state-run units through the stock market.

The note comes on the back of letters written by finance minister P. Chidambaram seeking sale of a 20 per cent stake in Nalco and a rump holding of 49 per cent in Balco.

Senior finance ministry mandarins said the funds raised would go to the disinvestment fund which will pay for health and education projects and restructuring of sick PSUs.

The note has sparked off a debate among ministries. The mines, steel and petroleum ministries have decided to protect their turf and are not receptive to Chidambaram’s idea. Even the agriculture ministry, which has nothing to do with PSUs, has opposed the note in principle.

However, the coal ministry has agreed to sell a stake in Neyvelli Lignite Corporation. The civil aviation ministry has also said it would approach the cabinet with divestment plans for both Indian Airlines and Air-India.

While the selloff move is tacitly supported by Prime Minister Manmohan Singh, it does not carry much weight with the government's Left allies. Both the CPM and CPI have warned the government of serious repercussions if it persists with a 10 per cent stake sale in Bhel. The Left feels that such stake sales tantamount to creeping divestment.

However, till now the government has not paid much heed to their objections.

Perhaps the most serious difference within the ruling Congress on the issue has come to the fore between petroleum minister Mani Shankar Aiyar and Chidambaram.

Aiyar’s ire is directed not only against the proposal to sell stake in PSUs but also against North Block's policy of heavily taxing PSU oil firms.

Aiyar has opposed the sell-off move on the ground that it would be tantamount to “selling the family silver to pay the Butler.” The argument is strangely similar to that dished out by BJP leader and former petroleum minister Ram Naik who opposed Arun Shourie’s bid to sell strategic stake in HPCL and BPCL.

The petroleum minister, however, cannot be faulted for changing his stand. When the Congress was in the Opposition he was a strong critic of the then disinvestment minister Shourie for trying to rush through with the privatisation of the blue-chip oil companies.

In the matter of taxes, Aiyar does not agree with Chidambaram's view that the restructuring of duties in the current budget are revenue neutral.