Unfazed by the ongoing economic turmoil and weak market conditions, the government is confident of meeting the Rs. 40,000-crore disinvestment target set for the current financial year, although in the first five months, it has been able to collect only Rs. 1,300 crore by divesting its stakes in small public sector entities including Neyveli Lignite Corporation (NLC), State Trading Corporation (STC), MMTC, and ITDC.
Senior finance ministry officials said disinvestment in Coal India Ltd (CIL) was on track, which alone will help raise Rs. 20,000 crore.
“Coal India is facing some labour protests but the government hopes to resolve the issues soon and proceed with the planned disinvestment in the company,” a senior government official said.
The government currently owns 90% in CIL and has plans to divest around 10% stake in the company that boasts of a huge cash balance of about Rs. 60,000 crore. CIL will be the single largest disinvestment for the government in the 2013-14 financial year.
Besides, CIL, the government is also eyeing disinvestment of its stake in a host of other PSUs such as Indian Oil Corporation, NHPC, PowerGrid, Engineers India Ltd and Hindustan Aeronautics. A 10% stake sale in IOC is expected to garner close to Rs. 6,000 crore, officials said.
Alongside, the proposal to disinvest 5% in another big PSU — Bhel has been deferred following valuation concerns and a bad financial performance by the company and a depleting order book for power equipment.
Bhel’s June quarter net profit had almost halved to Rs. 465.43 crore on account of lower sales. Notwithstanding this, the finance ministry is hopeful of achieving its disinvestment targets for the current fiscal.