Unaffected by the success on the divestment front that demonstrated 'the depth of the Indian capital market,' the pre-budget Economic Survey made clear the government's resolve against privatisation of profit-making PSUs.

Instead, the government would "devolve full managerial and commerical autonomy to successful, profit-making companies operating in a competitive environment. Generally, profit-making companies will not be privatised," it said.

Referring to the success of the six public issues which hit the markets in the last quarter of 2003-04, the Survey said about Rs 14,135 crore (Rs billion) (Rs 141.35 billion) was realised, showing the depth of the capital market.

• Economic Survey 2003-2004: Complete Coverage

Over 1.6 million retail investors were allotted shares in this exercise and the level of over-subscription ranged from 2.8 times in the case of IBP to 18.11 times in the case of Dredging Corporation of India.

Even large issues like IPCL and GAIL were subscribed 4.8 and 9.1 times, respectively. However, the Survey said government would only consider privatisation of sick units.

"While every effort will be made to modernise and restructure sick public sector companies and revive sick industries, chronically loss-making companies will either be sold off, or closed, after all workers have got their legitimate dues and compensation," it added.

The government also said it would "retain the existing 'navratna' companies in the public sector while these companies raise resources from the capital market."