Centre Against Residual Stake Sale in UTI Authority
Published: 21st July 2015 04:58 AM | Last Updated: 21st July 2015 04:58 AM | A+A A-
NEW DELHI: The government is not in favour of residual stake sale in SUUTI (Specified Undertaking of UTI), a Finance Ministry official said here on Monday after the review meeting on disinvestment plans for this fiscal.
The government plans to raise Rs 69,500 crore through PSU stake sale in the current fiscal. Of this, Rs 41,500 crore is to come from minority stake sale and another Rs 28,000 crore from strategic sale. “There is a view in the government that it should not sell stake in blue chip companies wherein government is a minority shareholder,” the official added.
However, the Department of Disinvestment is in the process of appointing merchant bankers for stake sale in 10 state-owned companies - Oil India, Container Corporation, NMDC, MMTC, ITDC, NTPC, Engineers India, BHEL, Nalco and Hindustan Copper. The stake sales could fetch about Rs 20,000 crore to the exchequer.
The government has also been trying to offload the remaining stake in Hindustan Zinc and Balco. Although it is not a part of this year’s disinvestment plans, but government is pushing for it to meet its ambitious target.
The government plans to proceed with stake divestment depending on the market conditions. Also as a part of strategic sales, it also plans to sell loss making ITDC hotels. The Ministry of Tourism and Culture has already begun the process for disinvestment of government’s stake in 8 of the 16 hotels under ITDC.
ITDC properties in Jammu & Kashmir, Guwahati, Bhubaneshwar and Puri will be on the block and the process of disinvestment has already begun.
Besides, two Centaur Hotels (part of Hotel Corporation of India under Air India) at Delhi and Srinagar will also be on the disinvestment list, a senior finance ministry official said. However, the timing and valuation has not been decided yet.
ONGC stake sale got hammered due to the lack of clarity on whether it would pick up the fuel subsidy tab from this year onwards on cooking gas and kerosene.
To bring out more clarity in the subsidy sharing mechanism, the government decided to put a cap on subsidy payout on kerosene at Rs 12 per litre. Any losses beyond Rs 12 per litre on sale of kerosene incurred by the state-owned oil marketing companies will have to be borne by ONGC and Oil India.
The government has also decided to bear the entire domestic cooking gas subsidy for the entire financial year 2015-16 by itself.
Just REC Stake Sale
Fetches Rs 1,610 cr
So far, the government has only managed to raise Rs 1,610 crore this fiscal — through a 5 per cent stake sale in Rural Electrification Corporation (REC) in April. No other share sale has taken place, mainly due to volatility in the stock market.
