All profitable public sector units to divest 10% stake

Use Equity Sale Funds On Social Sector: Pranab New Delhi: Faced with a growing fiscal deficit, the Union cabinet on Thursday gave its approval to divest stakes of up to 10% in all profitable central public sector enterprises (PSEs), including those which will be listed fresh.      "All profitable listed PSEs should need the mandatory listing of 10% public ownership,'' home minister P Chidambaram said after the meeting of the Cabinet Committee of Economic Affairs here. While all listed PSEs would increase their public holding to 10%, Chidambaram said unlisted profitable state-owned entities should go public.      Earlier, at the cabinet meeting, finance minister Pranab Mukherjee strongly pitched for funds generated from divestment to be used for expenditure in various social sector schemes. "Given the economic situation, I need this for at least three years,'' the FM told his cabinet colleagues at the meeting.      The decision attracted strong protests from UPA partner Trinamool as well as political rival CPM, validating the caution that the government has so far shown on the political hot-button issue.      The cabinet gave its consent on channelising the divestment proceeds into the National Investment Fund (NIF) and allowing the corpus generated after April 2009 till March 2012 to be available in full for investment as capital expenditure in specific social sector schemes.      So far, the guidelines laid down debarred the government from funding its budget deficit using the corpus. As of now, only the interest component could have been used. Govt to time entry of unlisted PSEs  New Delhi: The stringent conditions barring the government from using the PSU divestment corpus were incorporated during the previous UPA regime under Left pressure when the government was dependent on their support. Though the government no more has that compulsion, the issue may create a ruckus in the forthcoming session of parliament.      The current corpus of NIF is Rs 1,814 crore from divestments in Power Grid and REC. The payout to the government on NIF in the 2007 and 2008 was around Rs 290 crore.      Briefing the media, home minister P Chidambaram said that all those unlisted PSEs that have made a profit in the past three years and have a positive net worth should get listed on stock exchanges. He, however, said they would enter the market only at a suitable time to earn good returns.      Divestment in NMDC and MMTC is top on the charts as their current public shareholding is 1.62% and 0.67% respectively. As per the new directive, these companies are required to divest a minimum of 10%.      This year the government had offloaded its stake in Oil India Ltd and NHPC in pursuance of its divestment plan. Maruti Udyog Ltd, NTPC, Power Grid Corporation, Rural Electrification Corporation were the other PSEs which had been listed and part stakes offloaded to public. It had also expressed its desire to reduce its shareholding in NTPC and Sutluj Jal Vidyut Nigam.