Cabinet secretary Prabhat Kumar has, in keeping with the government strategy of accelerating the scope of disinvestment in 1998-99, summoned a meeting of the core group to decide on a fresh list of public sector undertakings to be referred to the Disinvestment Commission.
The meeting, to be scheduled in the next fortnight, will also take a view on strategic divestment - first proposed by the Disinvestment Commission - proposed in the budget from select PSUs like Indian Airlines and Videsh Sanchar Nigam Ltd.
This also gives the Disinvestment Commission a fresh lease of life, with it already having put in its recommendations on all but two of the 43 PSUs referred to it.
Significantly, the Commission's role has been undermined in the last few months with first the department of heavy industry announcing divestment from a list of 14 PSUs under its fold and now more recently the finance minister announcing that government equity in Indian Airlines would be pruned to 49 per cent.
None of these PSUs have been referred to the Divestment Commission and in the process violates the very norms laid down by the government. These had been reflected in a letter addressed by finance secretary Montek Singh Ahluwalia in a letter to all the parent ministries that all PSUs being considered for disinvestment would have to be first referred to the Divestment Commission.
The Commission so far has submitted seven reports covering the divestment pattern for 41 PSUs. Air India is among the two decisions still pending with the Commission.
In the Union Budget for 1998-99, the finance minister said the government would be going ahead with the disinvestment from Videsh Sanchar Nigam Ltd, Indian Oil Corporation, Gas Authority of India Ltd and Concor to raise Rs 5,000 crore.
Finance ministry officials now indicate that the government is exploring another round of divestment from a fresh batch of PSUs. It is also keen on pursuing the route of strategic divestment _ that is apportion a sizeable portion of the equity to a foreign player who may well be a technology provider. The immediate proposal under consideration is that in Videsh Sanchar Nigam Ltd and Indian Airlines.
The core group will take a view on strategic disinvestment and on the proposed timing of the issue. At an earlier meeting, the core group had come round to the view that "market-pricing" should be adhered to, while deciding the pricing of the issue.
In this context the group had also considered the method of book-building to arrive at an appropriate price. In addition, it favoured divestment in the domestic market _ which would also serve the dual purpose of providing quality scrips and reviving the dormant primary markets _ before proceeding to the international markets.
