Govt takes the cue from FM, plans AMC for PSUs

The disinvestment process has begun to feel the impact of the new presence in the finance ministry.
Briefing reporters after the Cabinet Committee on Disinvestment, disinvestment minister Arun Shourie said the government is contemplating, on finance minister Jaswant Singh’s suggestion, the creation of an Asset Management Co (AMC) to hold the government’s shares in public sector undertakings.
"FM Jaswant Singh suggested that we work together for creating an asset management company for managing all government equity in different PSUs,’’ said Mr Shourie.
Creation of an AMC was just a proposal and no decision was taken on the issue at the CCD, Mr Shourie clarified. Within a month, a paper would be prepared on the subject to facilitate discussion and informed decision-making.
The FM has also proposed that the disinvestment minister and the deputy chairman of the Planning Commission should work together on proposals for restructuring the financial institutions UTI, IFCI and IDBI. Such restructuring is being considered necessary as these FIs keep coming to the government for additional funding.
One consideration is how the FIs can take advantage of the higher valuation currently available for their considerable holdings of PSU stocks.
The CCD has also decided to set milestones for completion of the disinvestment process for the PSUs whose divestment has already begun. The administrative ministries will be responsible for adhering to the schedule so laid down.
The next CCD meeting, the first one after the monsoon session, would be presented with a paper on the milestones for each of the PSUs. The AMC could have multiple roles. It could be a holding company for all PSUs; it could hold all the residual government holdings in divested PSUs.