The Telegraph
Since 1st March, 1999
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Selloff net spreads to select few
- Finance minister picks profitable PSUs outside the navratna circle for small stake sales

New Delhi, Nov. 16: Small stake sales in Maruti Udyog this year could kick off the stalled selloff plan, which finally appears headed towards profitable state-run firms.

“We have identified some non-navratna public sector undertakings for minority divestment. We will hold discussions with the Left parties and, hopefully, we can divest in some of them,” finance minister P. Chidambaram told an economic editors’ conference here today.

One of the first companies in which the government will sell its stake is Maruti Udyog, of which it now owns 18 per cent. It expects Rs 1,000 crore from an 8 per cent sale.

Shipping Corporation of India, HPCL, Nalco and Balmer Lawrie are among the key firms in which a selloff is expected this financial year. Then, there will be initial public offers in Indian Airlines and Air-India. Both issues are likely to come out soon.

The Congress had, under pressure from the Left, dropped plans to sell holdings in navratna companies. The “nine jewels” ' actually eight in number 'includes Bhel, ONGC, SAIL and NTPC.

According to senior finance ministry officials, the aim is to eventually bring all unlisted, profitable PSUs ' each with a net worth of more than Rs 200 crore ' to the stock market. Minority stake sales in some is also an option.

Only 28 of the over 100 profit-making PSUs are listed. An internal note prepared by the finance ministry suggests listing more of these firms so that they can find new avenues of raising capital and are exposed to the rigours of market discipline. “It is, therefore, in public interest if all large profitable PSUs are listed, at least on the domestic stock exchanges,” the note states.

The Left has opposed divestment but Chidambaram did not believe the difference of opinion was a problem. “I don’t see the Left as a stumbling block. It’s a completely wrong impression that it is acting in that manner. There is a debate and it’s a healthy one.”

The minister said the government’s attempts to get development schemes in health, education and irrigation would help lessen poverty. “With growth, there is a chance for social justice and equity. Without growth, I’m afraid there is no chance for justice and equity.”

Chidambaram said his government was committed to opening up telecommunications, aviation and insurance to greater foreign investment. “We have delivered on telecom and aviation, not on insurance. Talks are on. In the course of time, I hope our allies will support us.”

FDI caps in telecom have been raised to 74 per cent, airports in Delhi and Mumbai have been opened to private bidders, but the ceiling for overseas investors in insurance stands at 26 per cent. Plans to push it up to 49 per cent have been drawn up, but they will need the consent of the Left, which believes that a sector like insurance needs to be more closely protected.

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