Addressing a seminar on capital markets organised by Assocham here on Monday, Sinha said the disinvestment process cannot be confined only to foreign investors in the GDR market. "Why should blue chips go only to the foreign investors. We will offer PSU shares at a discount to the retail investors in the country," he emphasised.

Sinha sees the discount sale of PSU shares as a major step in attracting investors back to the market and reviving their confidence. Sinha pointed out that the final package on PSU disinvestment will make adequate provision for retail disinvestment inthe domestic market and offer of shares to retail investors at a discount.

This would not only help revive the interest of small investors but also impart the required depth to the market. The government would take necessary steps to ensure that there is transparency and adequate regulation of the capital market.

Sinha also pointed out that the government has initiated steps to ease the burden of stamp duty. ``We will make the stamp duty requirement less onerous and work out a sort of national norm.'' The chief ministers have reached a consensus on this at a recent meeting convened by the finance minister. ``The modalities for this are being worked out. A panel of six chief ministers will give a report on the uniformity of state-level levies, which will also look into the stamp duties.''

Sinha, who emphasised the need for transparency and regulation, said, ``Regulation should help bring back investors into the market. We cannot pursue liberalisation without regulation. Adequate regulation andtransparency are the need of the hour.''

Meanwhile, Disinvestment Commission chairman GV Ramakrishna, who had earlier opposed the government's proposal to set up a special purpose vehicle (SPV) for carrying out the strategic sale, proposed the setting up of a trust with minimal government interference for the PSU selloff.

The PSUs marked for disinvestment must be handed over to the trust, which would ensure that the companies are professionally managed. The trust will have minimal government interference. The trust, he said, would help the PSU shares gain greater value through proper management and mechanism.

He said the government should, on an experimental basis, try out a new method wherein it transfers all existing shareholding to a national shareholding trust. The trust members, he proposed, will include chairman of a leading public sector bank, a chief of an insurance company, the finance secretary, the chief of the Disinvestment Commission and some eminent management experts.

Ramakrishna urgedthat there is no point in going to the public with a sick and a weak PSU.