Centre to guide states in divestment

Centre to guide states in divestment
RISHI RAJ

NEW DELHI, DECEMBER 28: To expedite the process of disinvestment in state-run public sector undertakings, a high-level committee has recommended that the Centre should show the light to the states in this regard by laying down broad guidelines and blueprint of how to carry out disinvestment.

The committee, headed by N J Kurien, Adviser (Finance) in the Planning Commission, in its interim report has suggested that while the stand of Government in general has been to allow no disinvestment in strategic sectors, a clearer direction is needed from the Centre to the states indicating the areas where the Government presence is necessary and the areas from where it should move out without delay.

According to sources, there may not be a standard procedure and pattern for reforms and states should be independent to follow the path thought to be best suited to the local conditions but the Centre could definitely provide broad guidelines. These broad guidelines should state whether by retaining a particular PSUpublic purpose is served or not. The sources said that the best example in this case had been that of state electricity boards (SEBs) where the central Government has shown the broad contours of reforms to the states and lot of states have accepted the blueprint of reforms.

At present, the state PSUs are engaged in a variety of activities ranging from industrial development, finance, trading and marketing, construction services, consumer goods, engineering goods as also development of backward regions and weaker sections of the society. The committee is of the view that the Centre should tell the states which are the areas from which it needs to get out totally and wherein it can be present although with some restructuring.

The committee, which studied the states of Maharashtra, Punjab, Haryana, Kerala, Karnataka, Tamil Nadu and Pondicherry, has indicated the progress of these states on PSU reforms.

On Haryana, it has stated that it is steering its reform policy of state PSUs based on therecommendations by the Cabinet sub-committee. The unbundling of the Haryana State Electricity Board was a major success in this area. However, sources said that the recent steps and utterances of Haryana Chief Minister, Om Prakash Chautala may derail the whole process.

The Punjab Government has taken steps to close down chronically loss-making non-core and non-strategic state PSUs. But in power sector, it is preferring to follow a wait and watch policy with regard to unbundling process.

In Karnataka, the general policy of the State Government is that while it might be necessary for Government to continue managing the public utilities for some more time.