"The previous government had earmarked 10 per cent of PSU sale proceeds for rehabilitation and restructuring PSUs. That is not sufficient and the entire proceeds should be used for the purpose," Badal told PTI in an interview.

Badal said the ministry did not have funds for bailing out sick PSUs and cited the example of its inability to inject funds in Hindustan Machine Tools (HMT) despite having a restructuring programme in place.

He said disinvestment proceeds should not be part of budgetary revenues.

The apex PSU body, the Standing Conference of Public Enterprises (Scope) had suggested formation of a development fund to revive sick units with Scope chairman Uddesh Kohli suggesting that divestment proceeds should form the core of such a fund.

On its part, the government has earmarked Rs1,400 crore to sick PSUs towards payments of salaries and other working capital requirement during 1998-99.

Asked about the issues raised by the Disinvestment Commission over its role and functioning, Badal said the industry ministry would discuss the "overall matters" regarding disinvestment as soon as the current session of Parliament is over. "All matters of disinvestment will be taken up for consideration including the setting up of the implementation mechanism for the whole process," Badal said.