Cabinet approves complete exit by govt from Scooters India

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Cabinet approves complete exit by govt from Scooters India

UPA bites the privatisation bullet—the Cabinet today approved complete exit by government from loss making Scooters India, reports Aakanksha Sethi.

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UPA bites the privatisation bullet-the Cabinet today approved complete exit by government from loss making Scooters India , reports Aakanksha Sethi.

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Here is a verbatim transcript of Aakanksha Sethi's comments on CNBC-TV18. Also watch the accompanying video.

Less than four months of his taking over as Ministry of Heavy Industries, he has gone ahead and floated the Cabinet note for the privatisation of Scooters India. And now it has been approved. This is UPA government's first privatisation. It holds 95% stake in Scooters India and it will offload the entire stake after it gets that nod from the Parliament.

Scooters India is a loss making PSU, it has been incurring operating losses since 2002. In 2008, it was declared a sick PSU. There have been several attempts to revive it. But it has been concluded that the revival is not possible because of an adverse product mix. It is based out of Lucknow. So, it does not have any auto clusters close by, it does not have good vendor relationship and technology obsolescence and the HR problems that PSU such as this faces. Ambika Soni today said that this wasn't a departure from the UPA's disinvestment policy, but just a one off case.

Ambika Soni, Information & Broadcasting Minister said, "This is case by case, as it comes up, it not a question of change. When this is running into loss, it is a heavy investment on the exchequer. It is a big load on the exchequer. So, it has been decided in this particular case, there is no policy change."

HMT Bearing is certainly on the cards also for privatisation. But as Ambika Soni says, "Apart from this, no other privatisation agenda and UPA II is going to stick to its 10% policy of divestment."