PSUs underpaying Govt: Kelkar

NEW DELHI, MAR 6: Finance secretary Vijay Kelkar today hit out at profit making public enterprises PSUs for not paying adequate dividen...

NEW DELHI, MAR 6: Finance secretary Vijay Kelkar today hit out at profit making public enterprises PSUs for not paying adequate dividend saying that as owner government would now insist on better returns and greater accountability.

quot;The days of cheap money are over. The government will put conditionalities on PSUs for accountability and better dividend,quot; he told PSU executives adding that those management which did not fulfil these conditionalities would have to pay. Replying to various queries on the Union Budget for 1999-2000 at an interactive seminar organised by the Standing Conference of Public Enterprises SCOPE, Kelkar blamed the oil PSUs, which recently bought government equity in other state-owned corporations, for not being able to lift the market prices of their scrips.

As the cross-holding was not initiated by the government and was oil companies8217; own decision, he said 8220;after the completion of the equity swapping they oil PSUs should have taken pain to explain the objective of theexercise to shareholders.8221;

Kelkar said the PSUs should do the explanation 8220;a bit more intensely8221; to improve their share value in the stock markets. According to various reports, the market capitalisation of Indian Oil, GAIL and ONGC, which were involved in the equity swap had declined about 25to 30 .

Kelkar said some of the profit making PSUs were not paying even half the dividend they were supposed to be paying the government. quot;The government8217;s support to such PSUs would be solely based on performance and accountability,quot; he said. The finance secretary said the process of disinvestment during 1999-2000 would be based on the reports of the disinvestment commission, which has so far submitted eight reports on 43 public sector units. quot;The mode of disinvestment for the next financial year would be either strategic sale or disinvestment of government equity in these units recommended by the commission,quot; he said. Finance Minister Yashwant Sinha had announced a disinvestment target of Rs 10,000 crore for1999-2000 in his budget speech.

Kelkar said it was for the first time that government talked of privatisation8217; and added that IPCL, Engineers India Limited EIL and Shipping Corporation of India SCI would be among the PSUs where government would shed its equity during the next fiscal.

Stating that the A to Z8217; of the budget was conceived by Sinha himself, the finance secretary said the budget had clearly focussed on a shift in paradigm. quot;The budget8217;s thrust on rule-based duty regime, housing sector and private investments to spur demand has brought about a clear shift in paradigm to the budget,quot; he said. Kelkar said the decision to reduce the multiple excise duty slabs to just three in the budget was to send out strong signals that Indian economy was matured and to put an end to ad hocism.