Free from Left obstacles, the UPA government, in its first unambiguous statement on economic reforms, today said it would divest equity in public sector undertakings, rejuvenate the banking system and push the pension Bill, besides finetuning the taxation system during its second term. It also made clear that contra-cyclical measures to arrest the effects of downturn would continue and so would pro-poor policies.

Addressing a joint session of Parliament — the first of the 15th Lok Sabha — on behalf of Prime Minister Manmohan Singh’s government, President Pratibha Patil said government equity in PSUs would be sold through public offers while ensuring that its holding does not go below 51 per cent. “Our fellow citizens have every right to own part of the shares of public sector companies, while the government retains majority shareholding and control,” she said.

There are over a dozen PSUs where the government has over 90 per cent stake. These can be sold in tranches. The move will increase public shareholding and will be in line with corporate governance principles. The government will set a timeframe for listing PSUs, she said. Public offers of two PSUs, Oil India and NHPC, were cleared by the earlier UPA Cabinet in 2007. These may be the first couple of PSUs to hit the primary market.

The President said the government would duly focus on adversely affected sectors such as infrastructure, exports, small and medium enterprises, and housing to restore their growth momentum. “The current financial year is expected to see a slowing down of growth on account of the global recession... Our immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown by a combination of sectoral and macro-level policies,” Patil said, indicating what could be store in Budget 2009-10 that Finance Minister Pranab Mukherjee will present in July first week.

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