Selloff score may be nil this year

Finance Minister P Chidambaram has asked officials to find alternative revenue streams to cover the projected shortfall of Rs 16,000 crore from disinvestment receipts in the forthcoming Budget.

In his interaction with officers last week, the minister indicated that no company was likely to be put on the block this fiscal. This also includes open market sale of shares.

As a result, the ministry will have to find alternative resources to bridge the fiscal deficit.

The officials said the minister had already reviewed the pending issues on the disinvestment agenda, which were a follow up of the public issues made in the last fiscal.

They said it was not clear what the role of the proposed department of disinvestment would be, as the Board of Industrial and Financial Reconstruction also undertook restructuring of sick units.

Chidambaram is reluctant to take up the sale of shares of any public sector units in 2004-05 as the move is sure to run into stiff opposition in Parliament. The move could also impact the other more pressing reforms issues pending before the new regime.

The Common Minimum Programme says privatisation will be considered on merit basis. Existing Navaratna companies will not be touched but chronically loss-making companies will either be sold off or closed after workers get their legitimate dues.

"The UPA will induct private industry to turn around companies that have potential for revival," it says.

The combined impact of the divestment receipts and the fiscal giveaways announced by former Finance Minister Jaswant Singh in January this year is estimated to be around Rs 30,000 crore.