"We are in talks with the Railway Board for sale of government equity in certain PSUs managed by Indian Railways, a source informed.

There are about half a dozen companies which are managed by Indian Railways. These include RITES, IRCON, IRFC, IRCTC and RailTel Corporation.

Since these companies are not listed it is likely that the initial public offer (IPO) will be accompanied by government offloading its stake.

Indian Railways, which is facing cash crunch, is looking at various ways to mobilize resources for undertaking its expansion programme.

Government has already pitched for reforms in Railways by proposing Foreign Direct Investment and Public Private Partnership (PPP) to meet the resource crunch.

"The disinvestment will be a part of the government exercise to engage private players in ancillary services as part of overall agenda," the source added.

The Finance Ministry plans to raise Rs 43,425 crore through disinvestment in PSUs in the current fiscal.

A host of companies have been lined up by the disinvestment department as candidates for stake sale. These include SAIL, NHPC, ONGC, REC and PFC.

PSUs should be competitive, says Arun Jaitley

Finance Minister Arun Jaitley on Tuesday said public sector undertakings should learn to function like private business houses in a competitive environment.

"The Public Sector Undertakings (PSUs) must learn how to function like any other business organization in a competitive environment and should not be run like a government department," he said, replying to supplementaries in the Rajya Sabha.

The minister informed the elders that 79 central public sector enterprises have incurred losses, of which 49 are sick.

"A total investment of Rs157,211 crore has been made in these enterprises," he said.

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