Calculated on the basis of BSE share prices that closed on Tuesday, an approval would fetch about R6,940 crore. This amount, however, does not include MMTC, the process of which would be decided separately.
Budget 2012-13 has set a target of R30,000 crore, to be raised through disinvestment. The amount, among other things, would prevent the government from exceeding the fiscal deficit target of 5.1% of the GDP by a big margin.
The decision to offload the shares comes at a time when the economic slowdown is dominating most deliberations in the North Block — the seat of the finance ministry. Though revenue is declining, the Centre is apprehensive of hiking oil prices due to political compulsions.
The department of disinvestments proposes to divest 9.59% equity in Hindustan Copper Limited out of the Union government’s share of 99.59%, 12.25% equity in NALCO out of its 87.15% share, 5% in Neyveli Lignite out of 93.56% (OFS method), 10% in Oil India out of 78.43%, and 9.33% in MMTC out of the government’s 99.33% shareholding.
Though the target set for 2011-12 through the disinvestments process was R40, 000 crore, the government could gather only R14, 000 crore due to volatile market conditions.