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Vikhe-Patil for sale of profitable PSUs

Heavy Industries and Public Enterprises Minister Balasaheb Vikhe-Patil is in favour of divesting only those public sector units, under his ministry, which have attained a certain degree of profitability.

In a communication to Prime Minister A B Vajpayee, Patil who has been suggesting a review of the divestment policy, proposed a four-pronged approach for sale of government equity in PSUs under the Department of Heavy Industries.

"In companies that have attained a certain degree of profitability and professionalism, dilution of government equity would be undertaken," Patil said in the letter.

In the case of ailing companies the minister said, if consultants favoured restructuring and divestment, the same would be done only after a proper assessment is done of the company's worth.

For companies which cannot be revived, a fast track method should be evolved to close them down after separating the employees, he said.

"If necessary, appropriate legislation may be enacted to put such companies beyond the purview of legal obstacles like SICA (South India Cotton Association)," Patil said.

Criticising the existing policy he said: "Experience has shown that various divestment exercises undertaken by the government have fallen woefully short of set targets. Thus, while the government has divested its control over PSUs, commensurate financial returns have not been forthcoming. The drain on government resources by sick PSUs through various capitalisation measures however continues unabated".

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