Govt should dilute stake in Navratnas by 20%: Assocham

The new government at the Centre should dilute its equity in Navratna companies by 20 per cent to mobilise Rs 3 lakh crore for containing the fiscal deficit, industry body Assocham said.      

"The top priority of the new government should be to dilute its stake in Navratna and mini-navratnas at least by 20 per cent by 2012," Assocham said, adding that diluting the stake in the PSUs would help the government mobilise Rs 3 lakh crore.      

The industry body said the fiscal deficit is a matter of concern for the new government as it has already exceeded five per cent of the GDP.      

There are 18 Navratna PSUs and 58 mini-Navratna companies in the county.      

After three stimulus packages to spur the economy, reeling under the impact of global financial meltdown, the fiscal deficit for 2009-10 is estimated at Rs 3,32,835 crore, 5.5 per cent of the GDP.      

"In the emerging political scenario, it is hoped that the spirit of reforms, particularly in sensitive sectors, would be maintained and, therefore, the government should hurry up to introduce them in banking, finance and insurance," Assocham President Sajjan Jindal said.

On the proposed Goods and Services Tax (GST), Assocham said it should be implemented latest by 2011-12.      

Rates of GST, proposed to be implemented from April 1, 2010, has not been decided yet. GST will replace excise duty, service tax at the Centre and VAT at the state level.      

Demanding special support for the exporters, Assocham said the sector needs a bailout package in terms of reduced duties.      

It further said the RBI should direct the scheduled commercial banks to extend credit to small and medium enterprises at lower rate of interest.      

"Agriculture is another area which needs special incentive of the government under its Bharat Nirman initiatives," the chamber said.