Sell-off agenda on the back burner

FE reports

With the ruling DMK government, which came to power in May 2006, making it unequivocally clear that it would not privatise or disinvest the government's holdings in any profit-making state public sector enterprise (PSE) in its election manifesto, it is curtains for the disinvestment process in the state.

The previous government had taken a few steps to close down or disinvest in PSEs. However, the current government, according to sources, is toeing quite a different line. It wants the profit-making PSEs to be put on a fast growth track and at the same time, it is trying to revive still viable, but loss-making units, through strategic alliances or fresh capital infusion.

Even though the earlier government had set the divestment ball rolling by identifying a handful of PSEs for potential privatisation or closure, the process was grounded due to political compulsions. According to available industry information, the state had 59 PSEs with a total investment of Rs 6,192 crore. Of this, over 33 units were identified as loss-making or sick.