New Delhi: Unhappy with the present disinvestment procedure, a Parliamentary panel has asked the government to promote retail participation instead of selling shares of PSUs to institutions through the Offer For Sale (OFS) route.
The committee are not in favour of 'Offer for Sale' of shares route by promoters through Stock Exchange Mechanism, instead the government should look for market penetration and encourage retail investors, the Standing Committee on Finance headed by BJP leader Yashwant Sinha said in its report tabled in Parliament Monday.
It also reiterated its earlier recommendation that the government should formulate a coherent disinvestment policy with clear direction and vision.
The report said that the committee regret to observe that in the absence of concrete disinvestment policy and lack of consistency in utilisation of disinvestment proceeds, the disinvestment proceeds of Central Public Sector Enterprises (CPSEs) over the years being treated as 'selling family's silver to pay grocery bills'.
All disinvestment proceeds being used for revenue expenditure are not socially justified, it said.
"As a result the corpus of National Investment Fund (NIF) is left with a meagre amount of Rs 1,814.45 crore for investment purpose, therefore, sustainable returns from the disinvestment proceeds could not be earned," it said.
Considering the low balance of funds in NIF and its impact on returns, it said, the panel is not convinced with the proposal of utilising the budgeted disinvestment proceeds of Rs 40,000 crore in 2013-14 for recapitalisation of Public Sector Banks (PSBs) and towards budgetary support to the Indian Railways.
"As recommended elsewhere in this Report, the government could easily find resources for capitalisation of PSBs through early setting up of financial holding company or internal resources of PSBs. Similar steps may also be taken for Indian Railways," it added.