The government will formulate an "action plan" by March 2010, wherein 61 unlisted public sector units (PSU) will be up for disinvestment

Action plan for PSU divestment by March

Nandini Goswami / DNA

Tuesday, December 22, 2009 2:23 IST

Kolkata: The government will formulate an "action plan" by March 2010, wherein 61 unlisted public sector units (PSU) will be up for disinvestment, Sunil Mitra, secretary, department of disinvestment in the finance ministry, said on Monday.

The government has already divested 5% stake in NHPC and Oil India this fiscal. "By the close of the fiscal, we plan to go in for disinvestment of four companies. We would divest 10% shares in NTPC, National Mining Development Corporation (NMDC), Rural Electrification Corporation (REC) and Satluj Jal Viyut Nigam," Mitra said on the sidelines of a seminar organised by the Indian Chamber of Commerce.

The department is holding talks with the concerned ministries for disinvestment of public sector undertakings (PSUs) and Central PSUs (CPSUs).

According to 2007-08 estimates, there are 61 companies that fulfill the requirements for a 10% stake sale, Mitra said. According to him, the criteria for disinvestment would include three years of consecutive profit, positive networth and not having incurred accumulated loss.

"After getting the actual number of companies in the basket, we will come up with a national action plan for disinvestment over the next two years," the disinvestment secretary said.

The targeted amount from the stake sale of NHPC and Oil India was Rs 1,120 crore, but, following divestment of shares, the total proceeds from the two CPSUs amounted to Rs 4,260 crore -- almost four times the targeted amount.

"We have targeted Rs 8,000 crore to be raised from divestment of NTPC," he said.

According to Mitra, disinvestment is a win-win for both the company (as the sales proceeds go up) and the employees.

Research has shown that for 9 CPSUs, post disinvestment, sales have gone up by 362%, assets by 108%, dividend by 600%, profit after tax by 173% and employee salary by 368%.

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