Profitable PSUs on the block

Navratnas to be excluded.

The government would sell small stakes in some profit-making public sector enterprises other than "navratna" companies, Finance Minister P Chidambaram said yesterday.

"We are in discussions," Chidambaram said. He was speaking to reporters here after addressing an international conference on "Southern Multinationals: A Rising force in the World Economy".

There are over 240 companies owned by the government and eight have been accorded "navratna" status, including the big oil companies and Bharat Heavy Electricals Ltd. As many as 88 of the non-navratna companies are making losses.

The Centre has been forced to put off the disinvestment of a part of its stake in BHEL due to stiff opposition from the Left, whose support is crucial for the Congress-led United Progressive Alliance (UPA) government.

Chidambaram also said the rupee's recent movement was orderly and that the widening trade deficit was not a cause for worry. The recent 25 basis-point increase in the Reserve Bank of India's reverse repo rate to 5.25 per cent, according to him, will not impact government borrowing. He also expects inflation to be around 5 per cent.

The rupee fell to a 13-month low of Rs 46.06 to the dollar in intra-day trade on Tuesday before closing at around the previous day's level at Rs 45.79.

"The rupee has appreciated against the euro, the yen and the sterling over the past few months and depreciated only nominally against the dollar. It has moved both ways. As we have always said, orderly movements both ways are acceptable. It is only disorderly movement that should cause concerns," he added.

The rupee has lost 3.7 per cent since the start of October and about 5 per cent since the start of this year.

India's trade deficit is expected to be at $48 billion this fiscal year. "We can sustain a trade deficit of this level. This means that capital goods are being imported, and that is good," he said. Chidambaram was hopeful that India would achieve its fiscal deficit target of 4.3 per cent this year.