In a key move for disinvestment of a top strategic production unit, the cabinet committee on economic affairs (CCEA) on Thursday will discuss a proposal to offload 10% of the government's share in Hindustan Aeronautics Ltd (HAL).
This is the UPA government's sixth disinvestment proposal since September and it hopes to mop up at least Rs. 3,000 crore from the sale of its HAL shares.
HAL, the country's sole military aircraft and helicopter manufacturer, is fully owned by the government. Apart from other military hardware, it also collaborates with Russia to manufacture India's most advanced fighter jet Sukhoi-30MKI.
If the CCEA approves the proposal, this would be the third disinvestment of a defence PSU. Earlier, the government had divested 24% shares in Bharat Electronics Limited (BEL) and 32% stakes in Bharat Earth Movers Limited (BEML).
Even as the defence ministry approved the plan to divest government's shares in September last year, the process failed to gather steam. But now, with the UPA brass determined to push reforms in different sectors and bring down its fiscal deficit, the proposal has been brought on the CCEA agenda.
It also comes close to the heels of finance minister P Chidambaram's meeting with officials to expedite the process.
Top government sources indicated that the timing of sale of shares would be decided later after reviewing the market conditions. With reforms process finally set free from the coalition compulsions, the UPA cleared five disinvestment proposals in the last two months. In October, the CCEA had approved the sale of 10% of its stake in the National Mineral Development Corporation (NMDC).
In September, the Centre cleared disinvestment of 9.33% shares in MMTC Ltd, 10% equity in Oil India Ltd, 12.15% disinvestment in National Aluminum Company and 9.59% stake in Hindustan Copper Limited.