Current Government Policy

The President of India’s address on 4th June 2009 unveiled the agenda of the Congress- led Government at the Centre. In keeping with the election manifesto of the Congress Party, the President’s address mentioned: “Our people have every right to own part of the shares of public sector companies while the Government retains majority shareholding and control. My Government will develop a roadmap for listing and people-ownership of public sector undertakings while ensuring that Government equity does not fall below 51%.” 
 
In line with the Presidents’ address, the Economic Survey (2008-09) stated the following as the Governments plan of action: "Revitalize the disinvestment program and plan to generate at least Rs. 25,000 crore per year. Complete the process of selling of 5-10% equity in previously identified profit making non-navratnas. List all unlisted public sector enterprises and sell a minimum of 10% of equity to the public. Auction all loss making PSUs that cannot be revived. For those in which net worth is zero, allow negative bidding in the form of debt write-off."  
 
The subsequent Union Budgets have also taken disinvestment on the agenda of the Government. 
 
The Government has also announced its intentions of raising the minimum public shareholding in listed companies to 25%. This figure was subsequently revised to 10%. This, besides bringing more quality paper in the market, shall also lead to disinvestment as the Government shall have to dilute its present holding to ensure the minimum public shareholding in the listed PSUs. At current prices, this could mean a divestment amount of over Rs. 106946 crore, in case 25% public shareholding were to be achieved and Rs. 12266 crore, in case 10% public shareholding were to be achieved. Click here for details.