Mr Shourie, PSUs are back to uplift masses

DELHI: The United Progressive Alliance intends to put the national resources under the control of public sector enterprises to optimal use by changing the political culture they operate in. Finance minister P Chidambaram today said that the Centre would give greater managerial and commercial autonomy to the boards of navratna PSUs, public sector banks, insurance companies such as LIC and GIC as also to other public sector companies that can make profits on a sustained basis in an open and competitive economy.
“These companies will be free to raise resources by entering the capital market and thereby offer new investment avenues to retail investors,� Mr Chidambaram said. This is a clear signal that fresh paper from the PSUs could flood the capital market in the coming months. NTPC could be the first such public offering where shares of a PSU would be offered to retail investors.
He added that all PSUs would be classified into three categories and any privatisation would be considered on a transparent and a consultative basis. Chronically loss making companies would be sold or closed down, he added. The PSUs are to be classified as navratna, profit making and all other PSUs. Each category would be dealt with individually and in a separate manner, he said.
The government has decided to merge the disinvestment ministry into finance ministry but the form that it would take is not clear yet. “Now that the disinvestment ministry is being merged with finance ministry, I will implement the policies of CMP that any privatisation will be considered on a transparent and consultative basis,� Mr Chidambaram said.
The CMP has very specifically stated that, “generally� profit-making companies will not be privatised. It had stated that the UPA government will not allow emergence of monopoly that could only serve to restrict competition. Also, public sector companies and nationalised banks will be encouraged to enter the capital market to raise resource and offer new investment avenues to retail investors.

Nine PSUs — BHEL, BPCL, GAIL, HPCL, IOC, MTNL, NTPC, ONGC and SAIL — currently enjoy navratna status. These PSUs are to be retained in the public sector. Bharat Sanchar Nigam Ltd is yet to be conferred navratna status, but that notwithstanding, the government is expected to be retain majority control in the enterprise. Twenty-eight companies including Bongaigaon Refineries and Petrochemicals Ltd, Chennai Petroleum Corporation of India, Container Corporation of India, Nalco, Power Grid, and National Fertilisers are in the miniratna category I and another 13 enterprises including RITES and MOIL are in category II of miniratnas.
The navratna status and mini-ratna enjoy enhanced financial, managerial and operational autonomy to drive their grants.