Plan to improve state-run companies important for divestment-Kotak

Reuters Market Eye - Longer term plan to improve performance of state-run companies important for government's divestment, Kotak says in a report.

"In our view, the government may want to review its very ownership of PSU companies with a far bolder program of privatization," note adds.

India targets $9.5 billion via privatisation this year to help plug its deficit.

Kotak adds that piece-meal divestments achieve little in terms of improving efficiency, returns for the government.

Says assets being converted into income to meet current expenditure without any consideration about the future not good.

Says best to put the money in separate funds that are used for current and future generations in a judicious manner.

Key divestments in pipeline

Oil and Natural Gas Corp

Coal India

NHPC

Steel Authority of India

Power Finance Corp

Rural Electrification Corp

(Reporting by Abhishek Vishnoi)