The one issue in the last budget that gave the stock market a nasty turn—a missing disinvestment time-table—could well turn out to be next big trigger for equity markets to extend their current bull run.
After six years, disinvestment proceeds are likely to re-enter budget estimates, with the Finance Ministry formulating a detailed plan that would specify a calendar to offload government equity in the new fiscal year starting April 1.
Stakes have been sold in trickles in recent years, but not showing up in the revenue and expenditure counts of the Centre.
Divestment went off the budgetary process in 2004 and a dedicated ‘national investment fund’ was set up two years later to channelise proceeds from it to help use the funds for productive purposes and not link it to casual expenditure to plug deficits.
“The department (of disinvestment) would convene a meeting with the management of the respective companies to formulate the disinvestment calendar commencing April 2010,” a senior official, who did not wish to be identified, said.
In November, the government approved a plan to list all unlisted Central public sector companies that have made profit in the past three years and have a positive net worth (assets greater than liabilities).
About 50 companies qualify for disinvestment under these criteria.
It has also been decided that the public should hold at least 10 per cent shares in all listed profitable government-owned
There are 10 listed public sector units where public shareholding is less than 10 per cent.