NEW DELHI: Without the Reserve Bank of India’s revaluation reserves, which are unlikely to figure in this year’s Union budget as an income for the Centre, North Block plans a push to attain revenue targets including a stiff disinvestment target by going in for strategic disinvestment of not only loss-making but also profit-making PSUs.
The government’s representatives have till now not been able to come to an understanding in the Bimal Jalan-led Committee looking into the revaluation of RBI’s reserves on the amount of reserves which the RBI has to hold. Consequently, sources said, that the Finance Ministry may not take into account any money as due from revaluation of reserves though it will budget for RBI giving a sizable dividend.
This, officials said, has placed more pressure on the government to meet its revenue targets as well as to attain the privatization target set in the interim budget. “Strategic disinvestment not only in loss-making PSUs such as Air India but also profit-making PSUs will be pushed through,” they said.
As part of the resolve, just two days ahead of the Budget, the government has sought expressions of interest from bidders for the profit-making Mini-Ratna firm Engineering Projects (India) Limited, which has an order book position of nearly Rs 5,000 crore plus and another Rs 5,000 crore in the pipeline. The initial bids are to come in by mid-August.
The government has already made it clear that it will be selling off state-run carrier Air India, while the Niti Aayog has recommended that some 50-odd PSUs including Pawan Hans, Scooters India, Bharat Pumps & Compressors, Hindustan Newsprint, HLL Life Care, Central Electronics and Bridge & Roof India be sold off. Besides, the government is also expected to divest some of its stake in big PSUs such as Indian Oil Corporation, Bharat Heavy Electricals and Power Grid.
Officials said that though the finance ministry will continue discussions on RBI parting with some of its reserves, as yet no final figure has been arrived at. The RBI has assiduously built up a corpus of Rs 9.59 lakh crore, including a currency and gold revaluation account worth Rs 6.91 lakh crore, which works out to 27 per cent of its assets, worth Rs 36.17 lakh crore. The differences between the mandarins of the finance ministry and the RBI’s officials have been over the issue of the equity and reserves to assets ratio which RBI should hold.
“There is a huge gap in what the Bimal Jalan Committee is willing to give as of now and what the Finance Ministry expects. In fact, the provisioning amount is much lesser than what the former RBI governor had agreed initially. The matter has been flagged to PMO and post-budget there is likely to be an informal discussion on it to arrive at a consensus,” senior finance ministry officials said.
Over 50 PSU assets identified for sale
Pawan Hans, Scooters India, Bharat Pumps & Compressors, Hindustan Newsprint, HLL Life Care, Central Electronics and Bridge & Roof India are some of the central public sector undertakings that will be sold off