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.

In line with its intention to focus on the ‘aam-aadmi’, the government would enact a new law (the Congress manifesto called it the National Food Security Act) to provide 25 kg of rice and wheat per month at Rs 3 a kg to all families living below poverty line (BPL). “This legislation will also be used to bring about broader systemic reforms in the Public Distribution System,” she said.

Another area where the UPA would focus itself is the expansion of public investment in infrastructure sectors, while encouraging public-private partnerships. “Bottlenecks and delays in implementation of infrastructure projects because of policies and procedures, especially in railways, power, highways, ports, airports and rural telecom will be systematically removed¿A large number of PPP projects in different areas currently awaiting government approval would be cleared expeditiously. The regulatory and legal framework for PPPs would be made more investment friendly,” she said, signalling possible changes to the model concession agreements (MCAs) for various sectors.

Observing that the country has benefited from large foreign investment flows, the President said foreign direct investment (FDI) needed to be encouraged through an appropriate policy regime. There is also need to augment resources in the banking and insurance sectors to permit them to serve the needs of society better, she pointed out. The Bill to amend the Insurance Act drafted by the UPA during its previous rule seeks to increase FDI in the sector to 49 per cent from 26 per cent now.

The government, Patil said, will recapitalise public sector banks and also give statutory backing to the pension regulator. In fact, the government has already drawn a Rs 20,000-crore recapitalisation blueprint for about 18 banks over the next two years. It is also seeking World Bank funding for the same.

On tax reforms, Patil said the government would pursue implementation of Goods and Service Tax (GST) replacing excise duty and service tax at the Central level and VAT at the state level. GST will be a single tax and culmination of a host of taxes such as VAT, excise duty and service tax. The government has set April 2010 as the deadline for its rollout.

On the issue of illegal money stashed abroad, the President said the government was fully seized of the issue and would vigorously pursue all necessary steps in coordination with the countries concerned.”