Speaking at a PHD seminar here on Wednesday, disinvestment minister Arun Jaitley said there can be "suitable exceptions" to this mode of sale, like broadening the equity base of PSUs, but primarily the government would stick to strategic sales.

In his presentation, the minister lashed out at the opponents of disinvestment, saying that they want to "create a scare" regarding the process and scandalise every transaction. This strategy has been adopted by opponents of disinvestment all over the world and not just in India, he added. However, the policy of his government is to maintain "complete transparency" for the process.

Market forces will determine the price at which a PSU will be sold. And the government will decide taking into account various factors, Jaitley said.The proceeds from the sale of PSUs will be used to restructure PSUs, finance the social sector requirements, and retire public debt, he said.

However, the purpose of disinvestment is not just to raise money for the government but to make them more efficient, he said. He opposed the idea of pumping in more money Disinvestment is picking up all over the country, Jaitley pointed out. The Haryana government has set up a disinvestment commission for state PSUs. Assam, Karnataka and Andhra Pradesh have also taken up initiatives in this direction, he added. "Even the West Bengal government is looking for a private partner for Great Eastern Hotel."The government is committed to protect workers interest and will attempt to save jobs of employees while disinvesting shares in PSUs, he said.

To widen the shareholding pattern in PSUs, the government is also working on an employee stock option scheme which would allow employees to get a share of the wealth they created, Jaitley said.

On the ESOP scheme, he said an interdepartmental committee is working on the details which will be finalised soon.

Ruling out that there would be massive job losses after privatisation, he said experience in other countries showed that in the long-term privatisation generated more employment and this would be the case in India too.

Though competition law is yet to be formulated, the government would take care that public monopolies are not replaced by private monopolies, Jaitley said.

A few successful privatisations to begin with will do the marketing job for the successive ones, he said. Calling privatisation "the art of the possible," Jaitley said that the policy of government is very clear.

Speaking at the seminar, Jardine Fleming resident director R Srinivasan said, "Privatisation is as much a political policy as it is economic."He pointed out that privatisation has to be integrated with other economic reforms.

The objective of disinvestment should be efficiency and not revenue generation. Revenue will follow efficiency, Srinivasan said.

He also favoured disinvestment in the telecom sector, saying that in developed as well as developing countries telecom privatisation has led the way.

Srinivasan also favoured linking of pension funds with privatisation.