Plan panel pitches for aggressive disinvestment

The Planning Commission today pitched for "aggressive" disinvestment, and said the proceeds from sale of government shares in public sector undertakings should be utilised for new investment projects.

"First of all we should be aggressive and secondly it (proceeds from disinvestment) should be used for new investment," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters at the Economic Editors' Conference here.

The modalities for expediting disinvestment and utilising the proceeds in new projects should be developed by the Finance Ministry, he said when asked whether the receipts should be used for bridging fiscal deficit which is expected to soar to 6.8 per cent of the GDP during 2009-10.

Under the current dispensation, the proceeds of disinvestment are parked in National Investment Fund (NIF) and the funds are used for financing social sector schemes and capital requirement of the PSUs. The NIF has a corpus of Rs 1,815 crore, mainly raised by offloading shares of the Power Grid Corporation in the last fiscal.

The government had already offloaded the shares of the Oil India Limited (OIL) and NHPC in the current fiscal, and has unveiled plans to reduce its shareholding in NTPC, Sutluj Jal Vidyut Nigam and Rural Electrification Corporation.