The officials told The Financial Express that the Maruti disinvestment exercise should be initiated "before it's too late". Despite the intense competition in the car market resulting in price wars, Maruti will still be able to get a decent price for its shares as it continues to be the undisputed market leader, they said.

Finance ministry officials, however, contend that any further dithering on the Government's part will definitely lead to an erosion in share valuation due to the financial pressures induced by price wars. Maruti's net profit dropped by 20 per cent to Rs 522 crore in 1998-99 from Rs 652 crore in 1997-98.

Officials said the finance ministry's view point has already been intimated to theCabinet Committee on Disinvestment. The final decision on the issue will, however, be taken only after the industry ministry makes a detailed proposal on the route and extent of the disinvestment. The year's disinvestment target would depend on the extent of holding that the Government will be in a position to divest in Maruti, they said. "So far, no proposal has come from the industry ministry," the officials said.

Pointing out that Maruti is no longer a public sector undertaking as the Government's equity has fallen marginally below 50 per cent, finance ministry officials said that the best option would be to go in for the open auction route.

"This would give the entire disinvestment process in Maruti the transparency which is so crucial for such a politically sensitive issue," they added.

The officials expressed the hope that the final tally on the proceeds from disinvestment of Government holding in PSUs was expected to touch about Rs 7,000 crore against the target of Rs 5,000 crore for the 1998-99fiscal, up by about Rs 2,000 crore.

Statutory powers to Disinvestment Commission ruled out

The Government has ruled out the possibility of giving statutory powers to the Disinvestment Commission as that could lead to complications.

Senior finance ministry officials clarified that clothing the commission with statutory powers would embarrass the concerned ministers who are answerable to the Parliament.

It is the Government which has to take the final responsibility. Statutory powers to the commission would only create confusion, they said. The Disinvestment Commission has been quite sore with the Government for not acting on its recommendations.

The Government did not want to create a situation as obtained in the case of the Telecom Regulatory Authority's proposals which were not accepted by the Government in toto. Trai is a statutory body set up under an Act of Parliament.

These officials, however, pointed out that all the recommendations of the Disinvestment Commission would be implementedand that the finance minister had made the position clear in this regard while announcing the 1999-2000 budget proposals. "We are broadly following the Commission's proposals," they added.