PSU Divestment is to be undertaken by the Govt in a big way to raise money. There are many angles to this. If any entity is earning from 360 Degrees today, its the Union Govt. The size of the budget has increased manyfold in past few years thanks to the sunshine phase of Indian Economy. The moolah was coming from all directions : Excise, Customs, CVD, Service Tax, Income Tax, Weath Tax, Gift Tax, Fringe Benefit Tax, Perquisite Tax, Professional Tax and what not. Income Tax on salaried individulas has been kept at shamefully high rates. Just imagine earing Rs 100 thru your blood & toil and donating Rs 33 to a beggar or even 22 for that matter. On top of the same, as a salaried person goes about making ends meet for his family, he is made to bear the burden of Excise, Customs, VAT, Serivce Tax etc etc as he pays for the goods and services consumed. One ends up paying 75% of the earnings to the govt machinery. Balance is taken up in school fee etc and one is hardly able to save. There come the banks with their liberal loaning schemes to lure cash strapped people to get into the proverbial debt trap. US was caught up in the trap which finally blew the lid last year.
Govt spending has now been more on itself than the public. All big projects are self funded thru project mgmt - on BOT basis, where again public is made ot pay for using them. What did I pay the Income Tax for? Why am I paying Vehicle Registration Tax which has gone from few hundred Rupees to tohousands of Rupees on ad-valorem basis today, when I have to pay toll every time I take out my vehicle. Look at the mess & chaos created at these toll plazas wasting millions of rupees worth of public time & fuel.
The additional revenues seem to have gone to mind boggling remunerations for MPs and VI Pay Commission for Govt servants. Will the high salaries really lift their mental status forcing them to leave corrupt practices. This is a big question which time only will answer. Till such time India remains at the bottom of Transparency Int'l's chart.
Coming back to PSU divestment. Since due to the economic downturn, revenues are dwindling, Govt finds it difficult to pay for its own functionaries and need cash. How easy to lure gullible public to again buy stock at premium, value of which would soon come down thru the cruel hands of stock market bears. If a Govt itself has decided to fleece its own public, God save the country!