Disinvestment target set to be missed
With only four months to go before the current financial year closes, the government has managed to raise only Rs 1,400 crore so far from stake sales in public sector companies. Anupama Airy and Mahua Venkatesh report.business Updated: Nov 11, 2013 02:29 IST
With only four months to go before the current financial year closes, the government has managed to raise only Rs 1,400 crore so far from stake sales in public sector companies, and it may fall far below its disinvestment target of Rs 40,000 crore set for 2013-14.
On current indications, despite a flurry of activity to push through big-ticket issues, the achieved figure may be no more than Rs 20,000 crore, government sources said.
The finance ministry was until recently even speaking of garnering as much as Rs 54,000 crore by diluting government stakes in Hindustan Zinc and Balco. Now that is clearly off.
“Disinvestment of a 5% stake sale in Coal India Ltd (CIL) will yield the government close to Rs 10,000 crore. Despite the workers union trying to put a spanner, the government is confident of completing the stake sale in the PSU,” said a senior government official.
The finance ministry is keen to push through disinvestment in Indian Oil Corp (IOC) in November itself to raise Rs 4,000 crore but there is a lack of clarity on how this will be achieved on time. A Bhel issue has been put off, and a sale to raise Rs 2,500 crore from NHPC seems to be going the same way.
“As NHPC is now looking at buy back of shares, plans to disinvest in the company have been put on the backburner,” the official said.
“In the case of IOC, the roadshows may be still held to test waters but given the weak investors sentiments in the company owing to subsidy issues, it is unlikely that a stake sale would happen this fiscal,” he added.
The sale of government’s remaining stakes in Hindustan Zinc and Balco are the only way it can rake in some revenues, the official said. The government currently holds 29.5% in HZL and 49% in Balco. Both firms are now controlled by Anil Agarwal-led Vedanta Group.
Finance minister P Chidambaram insists that India will meet its 2013/14 fiscal deficit target of 4.8% of the GDP.
“We shall not allow the red lines to be breached under any circumstances and we shall remain within the red lines. We are prepared to take difficult decisions in this regard, should the need arise,” the minister said recently.
First Published: Nov 10, 2013 23:38 IST