Assocham president K P Singh said resorting to buybacks and cross-holding of shares by public sector units as a disinvestment measure will only boost government revenues but not serve the purpose of disinvestments.

"Half-hearted measures to push through with disinvestments will offer no rewards," he told PTI in a pre-budget interview. President of Confederation of Indian Industry (CII) Rajesh Shah said government's desperate attempts to mop up resources through share buyback of PSU's and inducing FIs to buy PSU shares amount to ``sleight of hand'' which is contrary to the principle of privatisation.

``It is doubtful if such share buybacks will be possible before end of 1999,'' he said adding the government must disinvest 50 per cent to accord autonomy to the management of PSUs. The government had seta target of Rs 5000 cr for realisation through disinvestment of shares in PSUs but the targets slipped in the last two years. However in this fiscal ending March 1999, the government has succeeded so far in pushing through disinvestment in Container Corporation of India (Concor), Gas Authority of India (Gail), Videsh Sanchar Nigam Ltd (VSNL) to realise over Rs 1200 crore.

The prices at which the PSUs sold the shares in the market have been much less than what the scrips commanded some time back as the markets were generally depressed following recessionary trends. The government also hopes to realise about Rs 5000 crore through the cross holding route when cash rich oil PSUs like Oil and Natural Gas Corporation and Indian Oil Corporation buy equity in each other.

While the CII chief Rajesh Shah said the government's entire disinvestment programme has been haphazard apart from being delayed, the Ficci chief Sudhir Jalan said government has to develop a political will for realising disinvestment target.Jalan said as long as capital markets are dormant, though they are accepting good issues, a special purpose vehicle (SPV) can be created to hold shares of these companies. There has to be a company based approach rather than a target-based approach, Jalan said adding that though a target setting approach was useful as a general guideline one had to develop a system to accomplish this. Associated Chambers of Commerce and Industry (Assocham) president Singh said either the government should quickly implement recommendations of the Disinvestment Commission or try to implement the special purpose vehicle concept mooted by the finance secretary.

CII chief Shah said government must disinvest its share below 50 % to accord autonomy to the management as quite a few public sector enterprises have excellent managers. ``They need to be given the freedom and management autonomy to run their enterprises on commercial lines,'' he said adding PSUs should be board managed and government interference should be totallywithdrawn. CII, he said, would recommend aggressive privatisation. PHDCCI chief Ashok Khanna said to revitalise the contribution of PSUs towards industrial development, they would need to be subject to professional and autonomous management. The thrust of the management should be towards productive utilisation of existing assets, he said adding project expenditure needs to be optimised through adequate measures for effective cost and time management. It is imperative that the PSU management is held accountable for the performance of the unit. To facilitate transparency, periodic reviews need to be undertaken.