NEW DELHI: The government plans to fast forward investments in infrastructure, announce large scale disinvestment of public sector undertakings (PSUs) besides raising the caps for foreign portfolio investors in various sectors at par with foreign direct investment (FDI) limits. Top officials said several meetings have been held on infrastructure spending and ministries have been asked to give reports on all projects under their control “to ensure that spending is hastened in a host of infrastructure areas ranging from railways to ports to power projects and gas pipeline infrastructure.”
“If projects move at a fast pace and if they go beyond this year’s budget because of the pace of work, we will provide the extra funds needed. The whole idea is to fast-forward projects so that there is spending and jobs,” officials said.The government has promised to spend `100 lakh crore on infrastructure projects over the next five years, at an average of `20 lakh crore a year. The projects are being funded through a combination of direct budgetary support, borrowings and PSU savings.
According to officials, a proposal outlined in the budget — to raise the statutory limit for foreign portfolio funds from 24 per cent to the limits set sectorally for FDI — would also be brought forward. “This could help raise funds needed for projects as well as for sale of PSU shares which will be brought before the market," officials added.
The government is betting the move that could trigger a large inflow of funds into India as a result. A large number of PSUs have been identified, in which the government intends to reduce its stake to below 51 per cent, though it will still continue to control many of these PSUs by clubbing state held shareholding with equity controlled by state-run banks and financial institutions.
“Some PSUs like Air India will be totally privatized but others will see stake sale below 51 per cent,” said top finance ministry officials. The government has shown interest in selling strategic stake are Bharat Petroleum Corporation Ltd,Bharat Earthmovers Ltd and Nilachal Ispat Nigam Ltd. However, it is also keen to sell stake in oil sector giants like GAIL and Oil India Ltd to below 51 per cent and yet to continue controlling them.
Govt to reduce stake in some PSUs
Some PSUs have been identified in which the government intends to reduce its stake to below 51 per cent, though it will still continue to control many of these PSUs by clubbing shareholdings