The govt has done policy hari-keri and has over borrowed to the hilt and will stare a big hole in its balance sheet as slowdown and stagflation hit the economy and bite into its tax revenues.
The only real tool or magical rabbit up its sleeve is disinvestment.
But will disinvestment increase public wealth or decrease it that too when there is no policy reform and prudent management accompanying it? MPs are running PSU Firms like their private vote bank generating fiefdoms under the public good bogey!
Small investors have seen their money and their fair share in profits being usurped by a government in the name of public good in firms such as ONGC, GAIL and OIL.
Its last disinvestment stunt is a disaster with stocks all down 35% to 53% (SCI) from IPO or FPO prices, so is it prudent for long term investors (holding more than a year) to repeat their mistake ?
Is this Congress UPA govt promoting a flipping culture among investors ? And what signal do small investors get if the PSU share prices crash a few weeks after listing just like IPO s from private firms at dubious valuations that abound the markets ?
The Merchant bankers are a greedy lot, and what credibility do they have when one of the listed entities, Edelweiss is itself quoting at 71% discount to its IPO price and most of the IPOs promoted by ENAM in 2011 the most reputed of the lot are trading below IPO price.