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SCOPE offers to aid divestment process

Our Bureau

CHENNAI, April 9

THE Government should give up the ad hoc approach to disinvestment in public sector enterprises and chart out a long-term policy and roadmap for PSEs, according to the Chairman of the Standing Committee on Public Sector Enterprises (SCOPE), Mr D.K. Varma .

Governments worldwide were exiting businesses, and India could be no different. This was a reality that must be faced, he said.

SCOPE will act as a facilitator of the disinvestment process, and it is of the firm view that the PSEs must be prepared for the step to follow. The Government should identify and focus on its process. SCOPE had a vital role to play and was looking forwar d to a proactive interaction with the Government, he told reporters here.

The committee would play a proactive role in framing the policy and would make its approach clear later this month, when a meeting of its executive body would be held, he said.

He felt that disinvestment, privatisation or restructuring of PSEs should be based on a sector-specific or if required, unit specific-strategy. Once a decision had been taken regarding a PSU, the process should expedited. Political considerations or othe r reasons should not delay the process, he said.

At present the Government was proceeding on an ad hoc basis, according to Mr Varma. A clear policy towards PSE disinvestment would help the Government and the PSE to work in synchrony. If a company was destined to be closed because it was unviable, then a decision should be taken fast, he said.

The Balco issue was a case in point and it held lessons for everybody concerned, he said. PSEs should be prepared for the Government's exit from the enterprise, and various issues such as organisational, legal, commercial and human resource and attitudin al changes should be addressed, he said.

A clear long-term policy would, in addition to smoothening the process, also help to improve valuation of a unit. In disinvestment, enhancing value is also a responsibility of the Government, he said.

Apart from disinvestment and privatisation, the Government also had the option to strengthen a PSE through merger and consolidation. The thriving PSEs could be given greater autonomy, and Government interference avoided. These could then compete with pri vate players as seen in the case of the oil sector, he said.