Gvr For Separate Divestment Fund

Disinvestment Commission chairman G V Ramakrishna yesterday suggested creation of a disinvestment fund from sale of public sector undertakings (PSUs) equity and warned against utilising the amount to bridge budgetary deficit.

The proceeds collected by disinvesting PSU shares should be earmarked for social sector development only and it should not be utilised for reducing the fiscal and budgetary deficit, he said here speaking at an international seminar on governance and accountability, reflections, visions and priorities.

The whole purpose of public sector reforms will not be fulfilled unless a separate fund was created and channelised for developing social infrastructure, Ramakrishna said.

Though there was wide support to the commissions report on PSU sale among the general public, the government has not shown the same level of acceptance, he said.

He expressed hope that the new government would seriously consider the report and bring out reforms in public sector.

The fund should not be utilised for current revenue expenditure and should be used for reviving mrginally sick PSUs, capital restructuring and voluntary retirement schemes (VRS), he said.

Ramakrishna said accumulated losses of all the loss making PSUs have reached Rs 33,000 crore and budgetary support was being increased every year.

Most of the PSUs should go out of the purview of the public sector, but the whole process needed transparency and competitiveness, he said.

Only a few PSUs in the core sector and having strategic importance should remain in the public sector, he said.

Speaking on the occassion, former finance minister of Bangladesh M S Rahman said the role of government increases more in a liberalised era than a controlled one.

Every modern economy needs effective government and governance,
he said adding public sector reforms were needed in every economy but a coalition government felt handicapped in carrying out these reforms.

He said during his tenure, the disinvestment move was initiated by the Bangladesh government but various political compulsions postponed the process many times.