Table-1,India’s disinvestment
Name % of shares value in million dollar
BHEL 5% 622
RINL 10% NA
HAL 10% NA
NALCO 10% 273
MMTC 9.33% 160
NHPC 10% 416
NMDC 10% 1249
MOIL 10% 79
ANDREWYULE 10% 13
EIL 10% 158
RCFL 12.5% 76
HINDUSTAN
COPPER 10% 520
SAIL 5% 365
Government sell off funds may come from KIA,Saudi Arabian Bank, Mumtalakat and state pension funds.Zubair group,Al Khonji,Bahwan group and Qurum business group showed keen interest to finance.
Now, the question is,if government finance deficit through disinvestment through selling public enterprises, then within a short time public sector would vanish and all the public sector shares would transferred to private sectors especially to foreign investors so that India’s public wealth is transferred to the individual wealth holders of which a lion’s share are occupied by foreign entrepreneurs .If the process is going on ,then there would be no necessity of Government except to rule over the country for which people have to pay taxes and must be politically disciplined. In the era of globalization, which countries in the world do so? Japan, Germany, China, Sweden, Switzerland, Finland, are surplus countries in fiscal fronts, USA and a few European countries have been confronting with fiscal deficit but they are unwilling to divest to finance deficit. If so, the EU who faces Euro crisis, would sell shares of public enterprises to solve their crisis. But, they did not.ECB had no such plan, even they are thinking ifs and buts for issuing Euro bonds in the world market. Besides, Europe, USA, Japan are highly indebted countries but they are disinterested to finance debt or fiscal deficit through disinvestment of public sector economy’s wealth. In the capital market too, India enters into national/international share markets of their government capital and did not find any positive result because of its low credit rating having BBB- in comparison to AAA,AAA+ ETC.
Therefore, Government should decide carefully what fiscal policy would fit to the liberalization of capital flows regime, which shares would be competitive in the world market and what policy would achieve more welfare to the people because it is the peoples economy not the decision makers.