Addressing mediapersons after a meeting of the Cabinet Committee on Economic Affairs (CCEA) on Thursday, finance minister P Chidambaram said that proceeds from disinvestment of PSUs after April 1 will find their way to the new fund. Public sector fund managers would manage the fund and the returns therefrom would be significantly higher than the dividend-market price ratio of PSUs, which at present is at 2%, he said.
The proceeds would be treated as capital receipts and as they are spent, would be reckoned as revenue expenditure. Mr Chidambaram said, The (previous) NDA (government) used disinvestment proceeds for current expenditure.
... target likely to top Rs 10,000 cr in 2005-06
Finance minister P Chidambaram is likely to fix a substantially higher disinvestment receipts target for the next fiscal.
Defending the initial opposition of the Congress and other constituents of the UPA to the disinvestment programme of the NDA government, the minister said the previous government was using the proceeds mainly for bridging fiscal deficit. The setting up of the fund was in line with the National Common Minimum Programme of the government, he said.
The returns from the fund will be invested in social sectors like education, health and employment generation and for revival of sick PSUs, he said, adding the issue has been discussed with the Left parties at the co-ordination committee meeting.
Meanwhile, the CCEA deferred a decision on the sale of 10% government holding in Bharat Heavy Electricals Ltd and about 8% in Maruti Udyog. A decision will be taken up in the next few weeks. The note on Bhel could not be taken up today, Mr Chidambaram said.
While the government has fixed a Rs 4,000 crore disinvestment target for the current fiscal, it has garnered just Rs 2,684 crore till now.