The Union Minister of Divestment, Arun Shourie, on Monday said his ministry saw the potential of raising up to Rs 100,000 crore (Rs 1,000 billion) every year from the equity markets.

Shourie said the divestment ministry was planning to submit a plan to Prime Minister Atal Bihari Vajpayee for raising money from the market every year for the next five years. The plan to be submitted for raising the money will be for a period of one year, three years and five years.

"The money can be used for worthwhile projects," he said. Asked specifically whether the ministry was planning to raise Rs 100,000 crore every year, Shourie said he had been told by his financial advisers of such a potential but "it doesn't mean that the government has firm plans as such".

Shourie also said the UTI Index Fund should play a more active role in stabilising the market during times of volatility.

Shourie, who was speaking at a gathering of investors and brokers at the Bombay Stock Exchange, said the resources so raised would go into special projects such as interlinking of rivers, addressing water shortages and making India a knowledge hub, among others.

He said the experience with ONGC had shown there was a lot of investor interest in Indian paper, both within the country and abroad.

"We were able to raise Rs 10,000 crore (Rs 100 billion) with a minimum of effort," he said. Shourie also made a point about the financial advisers -- merchant bankers to the various issues -- being too conservative in their pricing. If ONGC had been sold at a higher price it would still have attracted the same interest, he said.

Talking about the volatility in the markets, Shourie said, "The UTI Index Fund should be put to more use than it has been so far." He said that the volatility in the market had to be countered and the Index Fund should be used since "it had been set up for that purpose".

Expanding on the theme of self-dependence and India Shining, Shourie said, "We have to reduce dependence on the Rs 80,000 crore (Rs 800 billion) worth of oil imports every year."

He however said that since public money was involved the government had to assure investors of efficiency, honest execution (of projects) and proper use of resources.

Shourie said: "We have been in a shortage mentality which has handicapped India for 45 years."

He pointed out that raising rupee resources was no longer a constraint.