Speaking to The Financial Express, Gangopadhyay said that all the other options will lead to unhappy situations. "If the government doesn't disinvest in Maruti, it has to either keep on investing in the company or stop investing and go for debts for more money."

Investing more money would hardly be advisable, as the government finances are in a mess. "In any case, the business of government is not business. It should be putting money in the social sector instead, which is its primary duty," Gangopadhyay said.

On the other hand, if the government goes for debt, it would be bad for Maruti, and that too at a time when competition in the automobile sector is stiffening, said Gangopadhyay. As it is, the net profit of the company has come down by 20 per cent.

"The best option is to sell your stake when you can," he said.Thenoted economist's argument is that there is "absolutely no reason" for the government to hold its stake in the company. "PSUs were set up to, among other things, boost the private sector. Maruti doesn't do it. It is not in the basic sector like steel. Further, employment generation is better in the private sector," Gangopadhyay said.

He added that the government equity should go to the highest bidder which, in all probability, would be Suzuki only.

Gangopadhyay felt that the use of the term `disinvestment' is a bit "silly"; it "sounds bad." People use it because they don't want to use the term `privatisation.'

But it is more than semantic confusion. "I don't think the government understands what the disinvestment process means," Gangopadhyay said. "It's not just lowering government stake but privatisation, getting out of commercial enterprises altogether and concentrate on its basic duties."However, the general opinion is such that even the champions of liberalisation and privatisation keep on talkingabout lowering the government stake. The farthest that "even the aggressive ones go is ask for 26 per cent government stake in PSUs," he said.

Cross-holdings is not disinvestment, he said. A proper disinvestment process is bound to be slow. Selling off the entire government equity will bring down the prices. "The process will take a long time. The government should set up a time-frame and stick to it," Gangopadhyay said.

Another problem in the way of disinvestment of PSUs is that vested interests have developed over the decades. There are strong unions with political affiliations. Then, control over PSUs gives tremendous economic powers to politicians and bureaucrats.

But as long as PSUs are there, their CEOs should be made responsible to the legislature, Gangopadhyay said. "The present practice of ministers reporting to the legislature should be discontinued."