The government on Thursday said it wants all unlisted profitable state-owned entities to go public and that all listed central public sector enterprises (CPSEs) would increase the public holding to 10 per cent.
However, the government stake will not fall below 51 per cent.
The decision that makes a lot of economic sense comes at a time when the government's finances are hugely strained.
Announcing the decision, Home Minister P Chidambaram, said whatever money the government gets will be used for be used for spending on social sector schemes.
The government has also decided that all unlisted CPSEs, which have made profit in the past 3 years and have a positive net worth should get listed on stock exchanges, he said, adding that CPSEs would enter the market at "appropriate" time.
The markets gave thumbs up to the decision reversing the losses seen in the morning.
UPA's disinvestment process had taken a backseat in its last tenure due to pressure from the Left allies but political consensus building is not such a big headache and disinvestment is a good way of unlocking value in its firms and plugging the fiscal gap.