The day is not far behind when government's holding in Public Sector Units (PSUs) will go below 51%, a top central government official said here on Thursday. He emphasised that the difference between actual share within an enterprise and control over it need to understood in a proper context.
"In Gujarat, we have seen this. It can also be witnessed in central PSUs. Such a day is not far behind," said Atanu Chakraborty, secretary in the Department of Investment and Public Asset Management (DIPAM), while addressing a lecture at Ahmedabad Management Association on Thursday.
Chakraborty, an IAS officer from Gujarat cadre, said that the year 2014 has brought in a paradigm shift in how government owned companies need to be managed. He said that losing share does not mean losing the control over the enterprise. "World over Differential Voting Rights (DVR) are gaining ground and many of the leading companies adapt them. While promoter may have a minority share he may continue to have control over the company. In India, L&T does not have promoter share and it continues to be a professionally run company," he said. More over, change in the ecosystem has altered the aspect of control with stakeholders like sectoral regulators and competition playing a critical role.
He said that if a company is owned by a government, it blocks the investment coming from the private sector. Disinvestment in such cases unlocks the investment, improves managerial efficiency and allocates resources where they are needed the most.
