Divesting 51% in PSUs can change face of India: Vedanta Chief

Written by PTI | New Delhi | Updated: Nov 6 2013, 01:52am hrs
Anil AgarwalAnil Agarwal has said this can change the face of modern India by creating more jobs and bringing in prosperity
Pitching for 51 per cent stake sale in PSUs, metal and mining conglomerate Vedanta Resources chief Anil Agarwal has said this can change the face of modern India by creating more jobs and bringing in prosperity.

"We may be having more than 250 state and central government companies... Why not divest 51 per cent of these companies in the market, with the caveat that no one can own more than 10 per cent of these companies...This is bound to change the face of modern India," Agarwal tweeted recently.

A lot of them must be listed and have a very good structure, but these companies are not progressing as were to be expected, he said in the tweet.

"Who can stop ONGC becoming another EXXON and SAIL be like VALE", he said adding, when companies like L&T, ICICI Bank, and HDFC Bank can run world class organisations without being owner-driven.

"I am sure these over 250 state and central government owned companies will also follow the example...The funds generated can be used by the government to strengthen infrastructure," he said.

Agarwal also advocated giving shares to the employees in the companies, which he said will in turn bring "security, as well in terms of financial as they would be getting more money than they currently draw, and their interests will be aligned."

The most talented, professional management will be identified and fully incentivised so that they can create world-class capacities and quality with the possibility to make the company 10 times bigger, including creating huge valuation, he said.

With this capacity, the companies may generate employment for a further 50 million people, he said.

Further, he stressed that ultimately, the government should be looking to divest further and hold only 26 per cent stake.

Stating the country is struggling with ever-mounting import bill and "this year it has imported USD 19 billion of coal", he said the government should look into auctioning of coal blocks.

"Coal India is sitting with a lot of coal blocks, why not government decide to sell 51 per cent of these various coal blocks to produce coal in India," he said.

About aluminium, he said India has potential to produce 15-20 million tonnes (MT) against present 2 MT output and a reserve of about 3,000 MT.

Last month, Agarwal has said that the government was "unnecessarily spending so much time" on taking a final call on selling its remaining stake in Hindustan Zinc and it needs to take a decision at the earliest on the issue.

Vedanta, which holds 51 per cent stake in Balco and 64.92 per cent stake in Hindustan Zinc through its subsidiary Sterlite Industries (now Sesa Sterlite), is keen to acquire the remaining stakes.