PSU selloff: Land valuation flayed

new delhi: a parliamentary committee has severely criticised the government on the issue of land valuation in divestment of stake in psus, saying asset valuation guidelines were "inadequate and vague". rejecting the government''s contention that value of assets which were not giving income to the psu to be divested were questionable, the standing committee on finance said in its 30th report that land should be valued separately and should be factored into total asset value. the recommendations, placed before the lok sabha earlier this week, came in the wake of privatisation of balco, where committee questioned the government on the rationale for sale of profit-making companies at a throwaway prices. in its reply, the disinvestment ministry said: "a company might have huge assets, but those assets are not giving income to the company." to buttress the argument, the disinvestment secretary pradeep baijal told the committee that though national textile corporation had land worth rs 2,400 crore, the property was an encumbered asset because no state government would give permission to sell that land. dismissing the arguments, the committee, headed by n janardhana reddy, asked the government to "modify the guidelines for evaluation of the assets of the psus under consideration for disinvestment which would take value of land invariably into consideration." "the committee is of the view that since land is a tangible asset which has value irrespective of whether it fetches income at a particular time, the land should be valued separately and should be factored into the computation of the total value of the assets of the company to be divested," the committee said. the observation came after the disinvestment secretary told the committee: "if they are not giving income to the company, then the value of those assets is questionable and i have shown that. in balco, i have got rs 826 crore. what i was getting earlier from this huge earnings company was rs 5.69 crore every year."