This was the basis for optimistic projections. But according to disinvestment commission chief, 1999-2000 may see a big shortfall in the target for realisations from PSU equity sale. The reason for GV Ramakrishna's scepticism is simple: disinvestment will not take off until a new government is in place after the general election. Disinvestment is a slow process. It is not as if implementation immediately follows the decision to disinvest.

The time lag, according Ramakrishna, ranges from eight months to a year. This means that the estimate of realisation from PSU equity sale can go awry. Last July, the governmentdecided to sell five per cent of IOC's equity. The price prevailing then was Rs 476 a share against the current Rs 331. If this particular disinvestment comes through, the government will collect at best Rs 500 crore. The sale of shares of other PSUs (like Balco, Modern Foods,etc) will hardly garner Rs 2,000 crore. This will be close to the average annual realisations from PSU equity sales during 1991-92 to 1997-98.

Facile scenarios for stepping up disinvestment are neither here nor there. When the term of the disinvestment panel ends this August, the government will have on hand more than 40 PSUs cleared for disinvestment. Ramakrishna's reckoning is that it will take the government at least five years to process these cases. The government, he adds, has implemented not even one disinvestment of the several cleared by the commission in the last three years. What is lacking is an implementing machinery. Ramakrishna wants the finance ministry to establish one. Sound advice for the new government.

Assessingthe demand for PSU equity, and timing their sale are specialised tasks requiring a dedicated body. Disinvestment targets, it appears, are set out to reconcile budget numbers. Shortfalls are covered by raising fiscal deficit with impunity. The government has no clear cut policy on public sector reform or on turning around PSUs.

How else can the lackadaisical treatment of the panel's clearances be explained? There is little evidence of interest in developing strategic partners, reflecting the absence of an industrial policy. Perhaps Ramakrishna's suggestion of allocating a certain proportion of disinvestment proceeds to social sector spending will give meaning to PSU equity sale.