Search the Internet          Tips  Sites: Finance, Investment

Centre nets Rs 113.55 bn from divestment

The Centre has realised a mammoth Rs 113.55 billion by divesting only 1.12 per cent of the total equity in public sector units.

Disclosing this at a lecture in Bhopal, Union divestment secretary Pradeep Baijal said the realisation from divestment had gone up significantly following adoption of competitive bidding process.

''At least Rs 100-120 trillion (Rs 10 to 12 lakh crore) could be realised from divestment, if the programme be pursued efficiently and with farsightedness,'' Baijal said adding that this huge sum could be used in meeting the debt.

Pointing out that divestment in the public sector undertakings had become essential, he said their value could be best realised only after privatisation.

''The labour unions were extending support to the programme,'' he noted.

Pointing out that divestment in the state PSUs was a viable option, the secretary said the value of any PSU could be gauged in terms of its command in the market.

Baijal said the government had brought down the import duty from 150 per cent to 30-35 per cent, which would be further slashed to 10 to 20 per cent in the next two years.

He said the lack of quantitative restrictions has lead to free import and subsequent pricing out of domestic products.

''When the competition is so intense, there is no rationale for government control over PSUs,'' he argued.

Baijal said that 99 per cent of the goods manufactured in the country were 50 to 100 times more expensive than similar products manufactured in China.

He said even though liberalisation of trade has assumed greater proportions, there was increasing pressure on the Centre to meet its debt obligations.

Baijal pointed out almost Rs 2580.05 billion would be spent on debt servicing. Under these circumstances, he said there was no logic in running the PSUs at losses or at very low rates of return.

Baijal said massive expenditure on debt servicing has left little scope for making expenditure on social sector and thereby jeopardising the very concept of the welfare state. In view of these multiple factors, there was no option but to divest PSUs.

The secretary said market capitalisation of 32 listed companies of the central sector in Bombay Stock Exchange had increased by 74 per cent in the last quarter. Six companies slated for strategic divestment have posted an increase of 350 per cent in their market capitalisation, he added.

He said an investment of Rs 2741.14 billion was deployed for retention of two million workforce in PSUs. The nation needs to concentrate on looking after the interest of the country's entire workforce of 380 million, he added.

UNI

ALSO READ:
The Divestment Development
More Money Headlines