Government blue-chip sale: Disinvestment next

The government’s decision to sell its stake in blue-chip companies will hopefully be followed by real divestment of some of its share in public sector units, particularly in sick units. The delay in announcing real divestment in public sector units is being attributed to indecision on the mode of disinvestment. This should not be very difficult as there must be enough thinking already done on a subject that has been on the government’s agenda for quite some time. The bureaucracy should not be allowed to sit over the decision if the political will already exists. The taxpayers have paid their hard-earned money to finance these loss-making units and this is money down the drain for too long. Hopefully, the government will waste no further time in taking a decision. The public sector has been used by politicians as their fiefdom to provide jobs and contracts to their chosen ones. Disinvestment will bring in corporate governance and transparency. Two years have already gone by but the government’s promise of minimum government and maximum governance still awaits fulfilment. History has shown that if this government does not do it, there is a danger that the process will again receive a setback. The urgency of the situation should not be lost on the Narendra Modi government. Besides, the taxpayer’s money can be put to better use financing social sector schemes and infrastructure. Under the earlier NDA government, Arun Shourie had started the process of selling off sick units quite successfully, but the government lost power and the process came to a halt under the Congress.

The proposed sale of stake in blue-chip companies among the 51 listed and unlisted companies through the Specified Undertaking of the Unit Trust of India is not divestment in the true sense of the word. Besides, it should have happened earlier. There is an appetite for blue-chip companies and the sale will certainly enrich the coffers of the government’s depleted treasury. It will also enable the government to meet its disinvestment target of between Rs 50,000 crore and Rs 60,000 crore. Its share in three of the blue-chip companies alone is expected to garner this amount. The government should also see that retail investors get a chance to bid for stock in these companies. The money, hopefully, will be used for productive purposes and not just to finance the fiscal deficit, which is over Rs 5 lakh crore.

There is a view that the government should not wait for the market to see better days as there is always an appetite for good stocks and government sector companies. Its recent sale of one unit netted nearly `3,000 crore. This should be a cue for the government to go ahead without wasting more time on committees, etc., to decide such crucial issues.