In a re-iteration of Prime Minister Manmohan Singh?s agenda of stake sales in all profitable public sector enterprises, the Economic Survey 2008-09 on Thursday has made a case for big-bang disinvestment by listing all unlisted PSUs and selling off loss making ones. The Survey, tabled in Parliament by finance minister Pranab Mukherjee has stressed on the need to ?revitalise the disinvestment programme and plan to generate at least Rs 25,000 crore per year.?

The move, if it goes through, would not only help PSUs fund their capacity expansion or restructuring plans but more significantly, would help finance the Centre?s fiscal deficit by at least 0.5% every year, as hinted at earlier by Singh when he said ?money does not grow on trees.? This could also mean that the National Investment Fund, where disinvestment proceeds are currently parked, would be wound up and transferred to the Consolidated Fund of India.

While the Union Budget on Monday is expected to announce a fresh disinvestment policy in sync with UPA?II?s stronger mandate, the Survey has already laid out a step-by-step plan for disinvestment. This includes selling off 5% to 10% equity in previously identified profit making non-navratnas and selling at least 10% stake in all unlisted PSUs.

Interestingly, going a step further, the Survey has also recommended ?corporatisation of departmental enterprises providing commercial services and also converting port trusts (minus excess land) into publicly listed companies with at least 49% shares held by the general public.?

More importantly, the Survey has also made a case for auctioning all loss making PSUs that cannot be revived. ?For those in which net worth is zero, allow negative bidding in the form of debt write-off,? it has further said. Of the 249 central PSUs, there are 18 navratna companies, 56 mini-navratna companies and 54 are chronically sick PSUs ? 28 are yet to commence operations.

While the Centre?s fiscal crunch may have added a sense of urgency to PSU reforms, implementing these ambitious plans would take some doing.

Although it may be free from the regressive Left, PSU stake sales have already been opposed by the UPA?s largest allies in the 15th Lok Sabha, the DMK and Trinamool Congress. A mere suggestion of reviving Neyveli Lignite Corporation?s plans, scuttled by the DMK in 2006, to offload 10% shares to the public, has already led to elaborate protest plans by the party in Tamil Nadu.