Centre's disinvestment roadmap to be ready by March 2010
Kolkata: Encouraged by the outcome of earlier initiatives, the Centre is preparing a roadmap to take the disinvestment process forward over the next two years.
"We should be ready with an action plan by March 2010 for taking the process of disinvestment forward in the next two years," Disinvestment Secretary Sunil Mitra said at an interaction with members of the Indian Chamber of Commerce.
Referring to disinvestment in National Hydel Power Corporation and the Oil India Limited, Mitra said while the enterprise value of NHPC rose from Rs 18,280 crore to Rs 37,702 crore after listing, that of OIL rose from Rs 9,844 crore to Rs 30,000 crore.
Mitra, who took charge as disinvestment secretary in July this year, said his department had identified 61 Central PSUs for disinvestment based on their performance in 2007-08.
Talks would be held with the administrative ministries of these CPSUs from January to March to work out the disinvestment modalities, he said.
Pointing out that SEBI has permitted the corporates to take the auction route to sell shares to insititutional investors, he said, while this would ensure a higher return through Follow-on Public Offers, it would also be possible to offer higher discounts to retail bidders.
Stating that the disinvestment move was aimed at providing 'people's ownership' to the profit-making PSUs, Mitra said only those CPSUs, which earned profit for at least three consecutive years, had a positive net worth and no accumulated losses were considered for disinvestment.
The divested companies showed a significant jump in sales and assets, he claimed, adding that a recent study of nine such companies ordered by him, revealed that following the IPO issue, these companies had seen a 364 per cent rise in sales, 108 per cent growth in assests and 600 per cent in dividend.
He said these companies also showed 170 per cent rise in net profit and 276 per cent in market capitalization post-disinvestment besides triggering a 368 per cent rise in salaries, wages and bonuses for employees.
Without naming any political party, Mitra said there was criticisim that disinvestment had benefitted only one per centof the people, that it inspired 'creeping privatisation' and weakened the edifice of the public sector.
"But 11 crore insurance policy holders and four crore people who had invested in mutual funds are also indirect beneficiaries of disinvestment," Mitra said.
Divestment also allowed the PSUs to leverage capital at competitive rates, he said.