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Government clears divestment strategy

The government turned down the proposals to accord strategic status to oil and engineering PSUS while approving the divestment strategy and decided to go ahead with the privatisation programme on a case-to-case basis.

The Cabinet Committee on Divestment, headed by Prime Minister Atal Bihari Vajpayee, on Thursday endorsed a strategy paper by the divestment ministry which said that strategic status would be continued only for Defence, Railways and Atomic Energy sectors.

At the same time, CCD said that the divestment ministry would have to approach the concerned administrative ministry for divestment in any PSUs before it moved a proposal for Cabinet's approval to ensure that most of the issues relating to divestment in specific cases were sorted out, sources said.

In case of differences between Department of Divestment and administrative ministries the issues could be settled at CCD, sources said.

The endorsement of strategy paper assumes importance in the wake of demands from Petroleum Minister Ram Naik for strategic status to all oil PSUs for continuing majority stake of government on the grounds of national security.

Heavy Industry Minister Manohar Joshi had also sought strategic status for some of the engineering PSUs, including BHEL, while suggesting continuation of government equity in Maruti Udyog as the countervailing force to protect consumers.

PTI

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