Disinvestment of public sector companies gathered steam in the first year of UPA-II that saw two PSUs-- Oil India and NHPC-- raising around Rs 8,600 crore from IPOs and the way was cleared for divestment in three more state-run power companies in the new year.
2009 saw the government relaxing a rule to pump proceeds from disinvestment directly for social schemes. This was because its fiscal deficit has already widened over 6 per cent of GDP due to duty cuts and increased expenditure as part of stimulus packages given to spur the economy in the face of the global financial meltdown.
Free from the bickering of the Left parties, the UPA-II came out with clear-cut policy on disinvestment, asking all profitable listed PSUs to have minimum public holding of 10 per cent and all profitable unlisted PSUs to hit the capital markets. This makes around 60 PSUs eligible for disinvestment.
The listed CPSUs that are making profits and have public holding of under 10 per cent include trading firm MMTC, mining major NMDC, Neyveli Lignite Corporation, Engineers India, State Trading Corporation, Rashtriya Chemicals and Fertilisers, National Fertilisers and Andrew Yule.
At present, the public holdings in these companies range from 0.67 per cent in MMTC to about 9.6 per cent in Engineers India.
