NEW DELHI: A group of secretaries on strategic disinvestment has approved the sale of the government’s entire shareholding in Bharat Petroleum Corporation Ltd (BPCL) and the Shipping Corporation of India (SCI), paving the way for a complete exit from the two profit-making PSUs.
This will be the first significant strategic sale of PSUs by the BJP-led government at the Centre.
“Strategic sale of BPCL and SCI has been approved by the group of secretaries on disinvestment. It will now go to the Cabinet for approval,” a Finance Ministry official told TNIE.
The official added stake sale in BPCL may also require a nod from Parliament as the earlier company — Burmah Shell — had been nationalised through an act of Parliament.
Last year, 51.11% of HPCL had been sold to government-run ONGC. While it was technically called disinvestment, in effect it was a takeover of a PSU by another.
While the names of Tehri Hydro Development Corporation and North Eastern Electric Power Corporation Ltd were also in the list of companies to be taken up for strategic sale, officials could not confirm their approval.
In her Budget presented in July, Finance Minister Nirmala Sitharaman had indicated the government’s plans to bring down equity in PSUs to below 51% on a case-to-case basis and to go in for strategic disinvestments.
The government currently holds 53.29% stake in BPCL and 63.75% equity in SCI. In the interim Budget 2019-20 presented in February this year, it had pegged an ambitious disinvestment target of Rs 90,000 crore, which was further increased to Rs 1.05 lakh crore in July for the current financial year.
With expected shortfalls in GST and giveaways in corporate taxes, the government may fall short on revenue targets. That’s the reason why the finance ministry wants to go all out in fulfilling targets in non-tax collections like disinvestment.
On the cards
Govt may come out with public offerings of shares in TCIL, RailTel Corporation, National Seed Corporation, Water & Power Consultancy Services (India), FCI Aravali Gypsum and Mineral (India)
Worrying signs
(-)1.3% Was the overall core sector output growth for November 2015. August 2019’s figure of (-)0.5% is the worst performance of the economy since then, having entered negative territory