Divestment improves efficiency: Shourie

The government has divested stakes in 33 units including 22 hotels of ITC and Hotel Corporation of India since 1999-2000, and there has been an improvement in the performance of most public sector undertakings after divestment.

This was announced by Union Divestment Minister Arun Shourie in the Lok Sabha on Wednesday.

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"Modern Food Industries and Paradeep Phosphates were loss-making companies, but sales have increased after divestment and losses have been reduced significantly," Shourie said.

IPCL, a profitable company disinvested in June 2002, has reported a 6 per cent increase in gross turnover and 91 per cent increase in net profit in 2002-03 when compared to the previous year, he added.

The minister said in the case of Bharat Alluminium Corporation, various operational and input costs have been reduced, production of hot metal increased and the new management is considering a substantial increase in capacity.

"These examples show that efficiency enhancement has been achieved by disinvested PSUs," Shourie said.

In reply to another question, Shourie, who is also the minister of communications and information technology, said the government has not taken any decision for divestnment of Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd.

"Both the PSUs are already board-managed companies," he added.