Kolkata, Dec 21 (IANS) The central government will use the proceeds from divestment of public sector undertakings in capital investment for the next three years, an official said Monday.

The policy change was prompted by a financial crunch, Disinvestment Secretary Sunil Mitra said.

Till now the government was utilising 75 percent of the interest amount from the National Investment Fund, raised from the divestment proceeds, for social sector projects like mid-day meals in schools. The remaining amount was spent in meeting capital expenses, he said.

‘Now, the fund will be used directly for capital expenditure for three years,’ he said, adding market regulator Securities and Exchange Board of India (SEBI) had given the go-ahead for selling 65 percent of shares on the divestment table through auctions.

SEBI could also put a cap on the maximum number of shares that an institution could buy.

‘We will sell the shares through auctions instead of a price-sensitive formula,’ the bureaucrat said.

Between 1991 and 2009, the central government had collected Rs.58,000 crore from disinvestment of public sector undertakings shares, he said.

Of this amount, Rs.37,000 crore had been raised through minority sales and the rest from strategic sales.