Letter to BS: Govt should sell all its stake in loss-making PSUs at one go

This refers to “Tread warily on privatisation” (October 29) by T T Ram Mohan. The views are quite relevant to the ongoing disinvestment of public sector units (PSUs). The entire government stake should not be sold in one go, particularly in those PSUs that have deep losses and have suffered erosion of their net worth. Instead, only the controlling stake needs to be parted with and the balance equity may be sold later on, once the company has been brought back on the path to profit. 
 

Another point is the use of the disinvestment proceeds. This issue merits a serious discussion. Shouldn’t the amount be used towards creating new assets in infrastructure that would lead to economic development? Conventional wisdom suggests the pace of privatisation should be carefully calibrated so as to minimise any political cost whatsoever.

Sanjeev Kumar Singh  Jabalpur

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