MINISTER OF COMMUNICATIONS AND INFORMATION TECHNOLOGY AND MINISTER OF DISINVESTMENT (SHRI ARUN SHOURIE)
(a) to (f) A statement is laid on the table of the House.
Statement referred to in reply to parts (a), (b), (c), (d), (e) and (f) of the Lok Sabha Starred Question
No. 395 for 9-4-2003 regarding disinvestment of PSUs by Shri Trilochan Kanungo (position No.I5)
(a) & (b) The Public Sector Undertakings (PSUs)/units disinvested through strategic sale during the last three
years ending 31 st March, 2003 indicating the percentage of shares disinvested and the amount received against
the equity disinvested is given at Annexure-I. A statement indicating the value of land, the value of assets
and liabilities as per the last audited financial accounts of these PSUs preceding the year of disinvestment
is given at Annexure-II.
(c) The amount realised from disinvestment in PSUs has been deposited in the Consolidated Fund of India which
is used to finance social and economic development programs, rural development, poverty alleviation, PSU restructuring
and infrastructure development.
(d) The Government has disinvested its equity in the PSUs as indicated in Annexure-I in accordance with the
policy of the disinvestment wlder which all non-strategic PSUs can be disinvested up to a level of 26%, or lower on
a case by case basis.
(e) & (f) Disinvestment of PSUs through strategic sale was initiated only about three years back and most
of the transactions have been concluded in the last two years. Sufficient time has not elapsed so far for a rigourious
analysis of its impact. However, anecdotal evidence suggests that it has facilitated the productive use of assets
which will contribute to growth and employment. Data on the sales and profit of the disinvested PSUs, as given by
the concerned companies is given in Annexure-III. Information provided by the companies suggests that reduction in
employment is minimal. Often it is a continuation of restructuring initiated earlier, necessitated by the internal
requirements of the disinvested company. In one case employment has increased after disinvestment. There have been
no cases of retrenchment. Pending wage agreements have been finalised in several cases resulting in an increase
in wages and allowances for employees.
Modern Food Industries (India) Ltd. (MFIL) and Paradeep Phosphates Ltd. (PPL) were loss-making companies
prior to disinvestment. Post disinvestment, the companies have seen a substantial growth in sales and loss levels
have been significantly reduced. Indian Petrochemicals Corporation Ltd. (IPCL) was a profitable company, which was
disinvested in June, 2002. During the first nine months of 2002-2003 as reported by the company, there has been
an 11% increase in gross turnover and a 104% increase in net profit as compared to the same period in the previous
year. In BALCO, various operational and input costs have been reduced, the production of hot metal has increased and
the new management is considering a substantial increase in the capacity.
These examples show that efficiency enhancement has been achieved by disinvested PSUs, which is beneficial
for the economy and for employment.
Annexure I
Statement referred to parts (a) & (b) of the Lok Sabha Starred Question No. 395 for 9-4-2003
regarding disinvestment of PSUs by Shri Trilochan Kanungo
PSUs disinvested through strategic sale
Name of PSUs % of equity Amount rcalised disinvested (Rs. in crore)
2000-01
1. Bharat Aluminium Company Ltd. (BALCO) 51.00 551.50
2001-02
1 HTL Ltd. 74.00 55.00
2. CMC Ltd. 51.00 152.00
3. India Tourism Development Corporation Ltd.(ITDC)
i) Ashok Bangalore Long term lease cum 39.41@ management contract ii) Bodhgaya Ashok 100 1.81 iii) Hassan Ashok 100 2.27 iv) Madurai Ashok 100 4.97 v) TBABR, Mamallapuram 100 6.13 vi) Agra Ashok 100 3.61 vii) Laxmi Vilas Palace, Udaipur 100 6.77 viii) Qutub Hotel, New Delhi 100 34.46 ix) Lodhi Hotel, New Delhi 100 71.93
Sub-total 171.36
4. Hotel Corporation of India Lid (HCI)
i) Centaur Hotel Juhu Beach, Mumbai 100 153.00 ii) Indo Hokke Hotels Ltd Rajgir 100 6.51
Sub-total 159.51#
5 IBP Ltd. 33.58 1153.68
6 Videsh Sanchar Nigam Ltd. 25.00 3689.00##
7 Paradeep Phosphates Ltd. 74 151.70
2002-2003
1 Hindustan Zinc Ltd. 26.00 445.00
2. Maruti Udyog Nigam Ltd - 1000.00$
3 Indian Petrochemicals Corporation Ltd. (IPCL) 26.00 1491.00
4 HCI Centaur Hotel Airport, Mumbai 100 83.00#
5 ITDC
i) KABR, Kovalam 100 40.39 ii) Manali Ashok 100 3.65 iii) Khajuraho Ashok 100 2.19 iv) Varanasi Ashok 100 8.38 v) Aurangabad Ashok 100 16.50 vi) Kanishka Ashok 100 92.37 vii) Indraprastha 100 43.39 viii) Chandigarh Project (incomplete) 100 17.27 ix) Ranjit 100 29.28 x) Airport Ashok Kolkata 100 19.39
# Proceeds gone to Air India
## Includes dividend of Rs.755 crore and special interim dividend and dividend tax of Rs. 1,495 crore.
$ Control Premium received against renunciation of rights issues in MUL by Government resulting in Government equity in Maruti Udyog reduced from 49.74 % to 45.54 %
@ Inclusive of Minimum Guaranteed Annual Payment (MGAP), Security Deposit and Business Transfer Consideration etc.
Annexure II
Statement referred to parts (a) & (b) of the Lok Sabha Starred Question
No. 395 for 9-4-2003 re2ardin2 Disinvestment of PSUs bv Shri Trilochan Kanungo
(Rs. in crore)
Value of Value of Assets Value of liabilities
Name of PSUs land (including value net of shareholders` of land) fund)
1. Bharat Aluminium Company 6.71 1210.05 505.90 Ltd. (BALCO)
2. HTL Ltd. 0.11 333.96 276.34
3. CMC Ltd. 353.16 278.49
4 India Tourism Developmynt 3.97 314.59 110.77 Corporation #
5 Hotel Corporation of India# 0.79 117.16 76.56
6. IBP Ltd. 51.16 1490.07 1121.00
7. Videsh Sanchar Nigam Ltd. 75.10 10069.26 3480.52
8. Paradeep Phosphates Ltd. 3.71 1364.59 1016.95
9. Hindustan Zinc Ltd. 10.91 1501.50 434.23
10 Maruti Udyog Nigam Ltd. 8.50 4828.50 2121.20
11. Indian Petrochemicals 84.95 8253.07 5425.78 Corporation Ltd. (IPCL)
# Data in respect of ITDC and HCI are for the respective companies as a whole and pertain to the audited accounts of the financial year prior to the conclusion of the transactions.
Annexure III
Statement referred to parts (e) & (f)of the Lok Sabha Starred Question No. 395 for 9-4-2003
reaarding Disinvestment of PSUs bv Shri Trilochan Kanungo
Sales/Profit Figures of Disinvested PSUs
Sl.No. Company Name Period Sale (Rs. in cr.) Net Profit (Rs. in cr.)
1 MFIL# Jan to Dec. 2001 232 -12
2 BALCD 2001-02 714.65 18.76
3 CMC 2001-02 565.33 25.09
4 HTL 2001-02 233 -1075
5 VSNL Nine Months ending Dec. 02 3780 589
6 IBP Nine Months endina Dec. 02 6754 491
7 PPL Nine Months endina Dec. 02 499 -50.42
8 HZL Nine Months ending Dec. 02 1080 -
9 IPCL Nine Months ending Dec. 02 3656 114
