PFC, another navratna on the block: FM

Labour reforms and foreign direct investment in retailing are under consideration.

The Cabinet Committee on Economic Affairs has cleared disinvestment in two non-navratna public sector undertakings which include Power Finance Corporation (PFC), according to Finance Minister P Chidambaram.

Chidambaram, who is here to attend the Congress plenary session, however, refused to divulge the name of the other PSU.

The government had earlier proposed disinvestment in four PSUs to Left parties "" PFC, Neyveli Lignite Corporation, National Minerals Development Corporation (NMDC) and Hudco. The government has 90 to 100 per cent equity in these companies.

Speaking to reporters on the sidelines of the plenary session, Chidambaram virtually ruled out any further role for the Left parties on the issue of disinvestment in non-navratna PSUs.

The economic resolution of the Congress said disinvestment in other cases (non-navratna PSUs) should be done on merit to raise resources for the national investment fund.

Asked whether it implied the government would consult the Left parties in every case of disinvestment in PSUs, he clarified that it meant the CCEA would take a decision on it.

Chidambaram said that the government proposed to divest small portions of equity from non-navratna PSUs in which the government had large holdings. Chidambaram said it was not correct to say that the Left parties were impeding growth.

"They have a point of view and it is represented by 61 members in Parliament....We try to reach consensus. Ultimately, decisions are taken according to the National Common Minimum Programme," he said.

The finance minister asserted that disinvestment was not on the backburner. "We are not doing it for the sake of it, nor are we dismantling the public sector....We have to time it. We cannot bunch it."

He said both labour reforms and foreign direct investment in retailing were under consideration of the government.

As for retailing, there are two points of view. One argument is that it will stifle the traditional retail sector, while the other one is that, it will bring technology, employment and more remunerative prices to farmers.

The finance minister certainly subscribes to the other view. He said FDI in retail will not affect the existing retailer "" it will rather strengthen the supply chain.

In reply to a question on the modernisation of Delhi and Mumbai airports, Chidambaram said a group of ministers was considering it. "Two bids were earlier withdrawn. The GoM is now considering six bids for one airport, and five for another airport," he said.

Asked about the controversial cut in food subsidy, he clarified that the government had never proposed to increase the price of rice and wheat for below-poverty-line families. The proposal was to reduce quantity, he said. When there was a huge buffer stock of grain, the quantity had been increased.

But, circumstances had changed as the country was left with only normal buffer stock, he said. The finance minister, however, refused to say a final word on this and stated that the Cabinet would take a decision.

Arguing in favour of liberalisation in the services sector, Chidambaram said the country stood to gain from it because India had a comparative advantage in terms of skilled manpower in services like accounting, legal and medical.

He urged state governments to develop infrastructure facilities at centres other than capital cities to attract manufacturers there.

Elaborating on why the UPA government could take "legitimate pride" in the economic management of the country, he said last year, the economic growth was estimated to be 6.9 per cent.

"When final figures come, it is likely to be close to 7 per cent. As for the current year, indications are that the growth rate can be higher than 7 per cent. Inflation is down to 4.4 per cent and investment is booming," Chidambaram said.

He also said, while the government was committed to economic reforms and fiscal prudence, it could also not ignore social concerns. He elaborated on the government's programmes to address such concerns as Bharat nirman, the National Rural Employment Guarantee Act and the health mission.

Asked for his reaction to the prevalent public opinion that economic feeling dominated people's mind in today's India, Chidambaram said, "It is much better than communal feeling or religious bigotry.... Don't you want to be the economic superpower?"

FM SPEAK

Govt will divest small portions of equity from non-navratna PSUs in which it has large holdings

Labour reforms and foreign direct investment in retailing are under consideration

FDI in retail will not affect the existing retailer "" it will rather strengthen the supply chain

The country will gain from liberalising the labour sector as India has a comparative advantage in terms of skilled manpower in services like accounting, legal and medical

No increase in prices of rice and wheat for below-poverty-line families, only quantity to be reduced