The move is believed to be a fallout of the discussions that took place in the PM's meeting with his economic advisory council. The finance ministry is also believed to have pushed for the PM heading the group of ministers, given the sharp dissensions in the cabinet over the extent and pace of disinvestment.

Moreover, in the past few weeks, the process had got embroiled in controversies over what particular method needs to be followed. The fact that some of the PSUs such as IOC have opposed any disinvestment at the current market prices has also made it important that the group of ministers constituted be a powerful one.

The prime minister has already pointed out that the low efficiency of the public sector was bleeding the economy and something had to be done about it. According to an estimatemade by the finance ministry, annual `losses' of just the centrally-owned PSUs add up to around Rs 14,000 crore. These `losses' are based on what could have been earned if the government's equity investment had been put elsewhere. According to the ministry, since independence, such `losses' have wiped out a full year's GDP.

Finance ministry sources pointed out that, apart from deciding on the disinvestment of the four PSUs -- IOC, GAIL, VSNL and Concor -- the group of ministers would try and take the process further and decide on issues such as strategic sales and closing of certain PSUs. So far, for example, while the Disinvestment Commission has suggested a strategic sale of 19 units so far, all the government has done is to initiate the process of finding strategic sales for two companies.

Nor has any action been taken on the Disinvestment Commission's recommendations that 4 units be closed down. Interestingly, while the BJP's own industry minister Sikandar Bakht had said that eight chronically sickunits such as the Cycle Corporation of India were to be closed down -- the Cycle Corporation's wage bill is 14 times its turnover and its losses 30 times its turnover -- the cabinet has still not taken a decision on the matter.