The Hindu : National : Ministry of Disinvestment disbanded

Online edition of India's National Newspaper
Friday, May 28, 2004

National

National

Ministry of Disinvestment disbanded

By Sandeep Dikshit

NEW DELHI, MAY 27. The Prime Minister, Manmohan Singh, today announced the disbanding of the Ministry of Disinvestment but said the Department of Disinvestment would remain under the supervision of the Finance Ministry.

Promising selective privatisation following a transparent process of evaluation, Dr. Singh said: "Normally privatisation will not take place. In case of profit-making public sector undertakings (PSUs), other options will be exercised only under certain conditions. For instance, we will be looking at other options if a company is earning excessive profits due to monopoly conditions and cannot sustain this trend in competitive conditions." But PSUs making "decent" profits in competitive conditions would be "encouraged to grow and expand."

Dr. Singh said the country would be taken into confidence whenever a PSU was disinvested. "People must be told why privatisation of a certain PSU is a superior alternative. People must also be convinced about the manner in which a PSU has been evaluated."

He regretted the fact that during the tenure of the National Democratic Alliance Government, there was lack of transparency in evaluating the worth of several PSUs before selling them. In the selling of the Centaur hotel in Mumbai, a constitutional authority such as the Comptroller and Auditor-General had to express an opinion that was not "flattering" to the Government of the time, he noted.

While promising selective disinvestment of PSUs, Dr. Singh said that "does not mean we can't go to the market for resources but the resources will be so mobilised that the public sector character will not be lost."

As for loss-making PSUs, the Government would "sincerely" try to turn them around. If that approach failed, "we will look at other options" such as selling them or giving them to the private sector on a management contract basis.

When asked whether the autonomy promised to banks and PSUs would mean their being completely liberated from the administrative control of the controlling Ministries, Dr. Singh said that he "did not agree" with such an interpretation. "There will be a credible mechanism to give PSUs and banks the needed functional autonomy."

Asked whether the United Progressive Alliance's targeted growth for the economy target of 7 to 8 per cent reflected "growth pessimism," Dr. Singh said the Government would like to aim at a higher growth figure. "But it has to be backed by a credible policy to increase investments and savings, both public and private, before rushing to the conclusion that we can overnight achieve a growth rate of 10 per cent."

The Prime Minister did not reply to queries with regard to any downsizing of the Government and the implementation of various reports by the Expenditure Reforms Commission that are pending.

"A road map will be unveiled in 90 days. Subsidies will be made explanatory. Where required we will make the adjustments."

On the question of continuing fertilizer subsidies, that are perceived as helping rich farmers, Dr. Singh said that farmers were in great distress and in some States they were committing suicide.

"Therefore we can't get rid of fertilizer subsidies but we will review them in a manner that helps the agriculture sector to grow and the package is fiscally responsible," said the Prime Minister.

Printer friendly page
Send this article to Friends by E-Mail

National