Vijay Kelkar, chairman of the thirteenth finance commission, has called for a “much stronger” disinvestment process of public sector companies, saying the money raised should be used to take care of environment degradation.
Valuing the public sector units, both listed and unlisted, at $300-400 billion (Rs 13.8-18.4 lakh crore), Kelkar said the country needed to restructure its assets by moving half of the capital to areas that only the government could take care of. “We need to reshuffle the priorities and raise $300-400 billion by privatising public sector companies and use this money on environment,” he said.
“On a mark-to-market basis, our PSUs are valued between $300 billion and $400 billion. If you divest 50 per cent, you have a $200-billion fund,” he added. Without jeopardising the national capital, the fund could be used for new needs like environment, urban infrastructure, need for solar energy and mass rapid transport system. Noting that the domestic capital market was more sophisticated now, unlike in the past, he said the government should retreat from industries that can be handled by private sector players. “Now, we don’t require public sector hotels, airlines, etc. Earlier, when we didn’t have a capital market, we didn't have entrepreneurship,” he said, adding that building environment was a new capital requirement.
Kelkar said these were his personal views, though they could be reflected in the finance commission report, which, he said, would be submitted to President Pratibha Patil by December 31. The report would contain recommendations on the sharing of tax revenue between the Centre and states. The government had, in September, extended the tenure of the commission by three months. It was earlier required to submit a report in October.