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Road map for PSU disinvestment soon: fin secretary

Road map for PSU disinvestment soon: fin secretary
PTI
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First Published: Wed, Jul 15 2009. 03 01 PM IST
Updated: Wed, Jul 15 2009. 03 01 PM IST
New Delhi: The Finance Ministry on Wednesday said a road map for disinvestment in public sector units will be brought out in three-four weeks, but there would be no strategic sale.
The government will retain 51% stake in all public sector units, finance secretary Ashok Chawla said.
Finance minister Pranab Mukherjee had on Tuesday, in his reply to the debate on the Union Budget, said: “My ministry has initiated discussions with other ministries and departments for identifying the PSUs” for disinvestment.
The government has proposed to mop up Rs1,100 crore this fiscal from divestment of stake in PSUs.
Pointing out that there is some recovery in the economy, Chawla said at this point of time priority is given to growth.
He said more spending will lead to higher borrowings, but the government will not resort to monetisation of debt. Monetisation of debt is when the government directly borrows from RBI or the central bank subscribing to the government bonds directly.
The finance secretary said the government will borrow from the market right now and later RBI will support it via open market operations, through which the central bank sucks or lends liqudity to the system against government bonds.
The Centre’s fiscal deficit is pegged at 6.8% of GDP this fiscal, as expenditure increases and gross tax receipts decline due to continuance of stimulus packages. The government’s market borrowing is pegged at about Rs4 lakh crore this fiscal.
Chawla said the market has appetite, as there is lot of liquidity in the system.
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First Published: Wed, Jul 15 2009. 03 01 PM IST