NEW DELHI: The government will continue to control the public-sector units even if its holding comes down below 51 per cent, Finance Minister Nirmala Sitharaman said on Saturday.
This will be done by clubbing the shareholding of state-run banks, financial institutions like LIC and other PSUs, she added.
“If the government wants to encourage more retail sales and its shareholding goes below 51 per cent, we will (still) continue to exercise control by clubbing shares held by other PSUs,” she said in an interaction with select media.
Sitharaman said she has a long list of PSUs cleared by the Cabinet Committee on Economic Affairs for disinvestment and that she would follow up on disinvestment in these companies.
The question of government control in PSUs arose after Sitharaman said in her maiden budget speech, “Government is considering, in case where the undertaking is still to be retained in government control, to go below 51 per cent to an appropriate level on a case-to-case basis.”
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Explaining how the clubbing of shareholding will be done, she said the Centre directly holds 65.64 per cent stake in ONGC, the government’s most profitable cash cow.
LIC holds 9.28 per cent equity in the oil giant, while Indian Oil and Gas Authority have 7.69 per cent and 2.45 per cent stake, respectively.
Under the new plan, the government could easily sell 20 per cent stake in ONGC, which at current prices could fetch over Rs 40,400 crore.
Some of the blue-chip government-run firms where the government holds stake near the 51 per cent mark and were feeling constrained from selling shares include Indian Oil Corporation, where it holds 52.18 per cent, Bharat Petroleum Corporation (53.29 per cent), Gail India (52.64 per cent) and PowerGrid Corporation (55.37 per cent).
Sitharaman said the CCEA has already given in-principle approval for share sale in a number of PSUs but disinvestment could not be taken up as the market conditions were not suitable.
Officials said shares held by state-run banks and financial bodies like the LIC that hold shares in a PSU would be clubbed to give the government the 51 per cent needed to retain control.