NEW DELHI: The Cabinet on Thursday approved the proposal for state-owned Power Finance Corporation (PFC) to acquire entire government holding in state-owned Rural Electrification Corporation (REC), that is likely to fetch the government `14,000 crore in disinvestment revenue.The government initially considered selling PFC to REC. However, on Wednesday the power ministry proposed PFC buying 52.63 per cent of government stake in REC.
By the end of September, the government held 57.99 per cent in REC and after the recent sale of stake through the CPSE ETF, it came down to 52.63 per cent.The government is also looking at NTPC acquiring Satluj Jal Vidyut Nigam. To speed up the process and cut down on procedural time, it selected ICICI Securities last week to advise and assist the ministry on the two deals. This will help it in the valuation process too.
Today’s deal will help the government scale up its disinvestment revenue this fiscal to meet the budgeted target of `80,000 crore. So far this year, it has managed to raise `32,000 crore from minority share sale in CPSEs and follow on offer of exchange traded funds — CPSE ETF and Bharat-22.Shares of state-owned PFC closed at BSE at 90.25, down 2.22 per cent and REC at 103.95, down 1.09 per cent.
The Cabinet also approved agriculture export policy with the aim of doubling agricultural exports from around $30 billion to $60 billion by 2022 and eventually to $100 billion in an effort to give fillip to farm prices.
All restrictions on exports of farm products have been removed, except for certain sensitive products like onion, whose export policy will be reviewed from time to time, Commerce Minister Suresh Prabhu said. Preference is for all organic, agro processed, high value and perishable products.
The Centre has suggested an outlay of `1,400 crore, and establishment of clusters in states for several commodities that will act as growth centres. Prabhu said states would be asked to remove restrictions such as mandi tax. He said several ports have been identified as being nodal points for exports.