Mumbai: Terming privatisation as the top-most priority, a senior finance ministry official Thursday said the government will sell "whatever is saleable", and is also planning to breach the minimum 51 percent ownership level in select entities.
Getting down the government stake below 51 percent will require amendments in the laws and will also ensure that these companies move beyond the remit of oversight agencies like the Central Vigilance Commission and the Comptroller & Auditor General. The official explained that the Cabinet had in the past decided to own at least 51 percent in PSUs and it is the Cabinet itself which will now have to take a call on going down below the level.
"The government is proposing/planning to bring down its equity holding below 51 percent in select Central public sector enterprises," he said, requesting not to be named. Such a move is "possible", the official said, adding it will require amendment to Section 241 of the Companies Act. Privatisation, he said, is "the top-most priority" for the government for the next three-four years.
"We have a strong support from the prime minister. With that support, I am 100 percent sure that whatever is saleable will be sold, and whatever is not saleable also will be tried," the official said. Admitting that there are roadblocks created by various stakeholders, including administrative ministries, employee unions, VIPs and members of Parliament to such moves, the official said the government has developed a "thick skin" now.
"It is not so easy to shed the 70-year-old mindset. Those who are sitting on the administrative control of PSUs don't want their control to go. But the government is absolutely committed to privatisation," the official said. In what can come as a relief to many and concerns to others, he said the move to amend the laws for paring state ownership below 51 percent will also take out these units out of the purview of various Central oversight agencies.
However, the official clarified that it will not be a lot of companies where the government will make such a move to go down below 51 percent and that even as the government goes through with such a move, the guiding principle will be not to cede control. Seventeen of the Sensex 30 companies have promoter holdings below 51 percent, for instance HDFC, the official said, adding all these companies are well run. Apart from minority stake sales, government will also continue with strategic sales in entities like Air India, he added.