• Deccan Chronicle
  • Andhra Bhoomi
  • Asian Age
  • ePaper
  •  Auto Refresh
Home

ePaper
Last Updated:11:11 AM IST | Saturday, Feb 04, 2023
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Menu
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Home > Markets > Modi 2.0 aims to raise $47 billion from disinvestment in 5 years
Markets
Modi 2.0 aims to raise $47 billion from disinvestment in 5 years
By  
DECCAN CHRONICLE.   , Published : Jul 13, 2019, 1:36 am IST | Updated : Jul 13, 2019, 1:36 am IST

Intends to cut government stake to 40 per cent in many PSUs.

Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman

New Delhi: The government has plans to raise as much as Rs 3.25 lakh crore ($47.4 billion) in the next five years by reducing its stakes in some large state-owned firms to 40 per cent, two senior government officials told Reuters, in the nation’s biggest privatisation push in more than two decades.

Last week, Finance Minister Nirmala Sitharaman in her budget announced that the government will look to reduce direct controlling stakes in some state-run firms on a case-by-case basis.

The plan will open up a steady stream of state companies to greater private investment, and target the kind of annual divestment revenue that will be crucial to meet fiscal deficit targets.

Prime Minister Narendra Modi’s administration already sold government stakes in a host of companies to raise a record $40.92 billion in his first five-year term, nearly three times the divestment proceeds of $14.52 billion achieved by the Congress party government in 2009-2014.

The government has identified a number of state-owned firms, including Oil and Natural Gas Corp, Indian Oil Corp,  GAIL (India), NHPC, NTPC, NMDC, Coal India and Bharat Heavy Electricals Ltd, said the sources, who declined to be named due to the sensitive nature of the matter.

“We have done a calculation on current prices and we could get Rs 3.25 trillion if we bring our stake down to 40 per cent in government companies, excluding banks,” one of the officials said.

The two officials, though, said the government is yet to gauge investor appetite for the state-owned companies and that the level of demand will be crucial to any timetable.

Analysts said the government would need to be flexible, especially given that a lot of the companies were in the resource sector and their prices would often depend on the volatility of commodities prices.

New Delhi wants to reduce its holdings in such a way that the cumulative stake of the government and state-owned companies such as Life Insurance Corporation (LIC) would continue to be above 51 per cent.

This year, the government is planning to put stakes in a group of companies into exchange traded funds, which would then be sold on public markets and raise at least Rs 40,000 crore, the officials said. The state’s stakes in those companies would be cut to 51 per c ent in some cases.

The government has set a divestment target of Rs 1.05 lakh crore for the current fiscal year.

It is in the process of identifying some power companies for merger with a view to cutting its stakes to 40 per cent, one of the sources said.

Eventually, the officials say the government would like to see its shareholdings reduced to 26 per cent in some companies if the ruling BJP gets a third term.

end-of
Tags: 
finance minister nirmala sitharaman, budget, divestment, prime minister narendra modi
Location: 
India, Delhi, New Delhi
Latest From Markets
After swinging over 423 points intra-day, the 30-share BSE Sensex ended down by 304.26 points, or 0.73 per cent, at 41,253.74. (Photo: File | PTI)

Sensex tanks 304 points on last day of 2019; Nifty drops below 12,200

The 30-share BSE Sensex fell 108.21 points or 0.26 per cent to 41,449.79, and the broader NSE Nifty slipped to 12,227.75. (Photo: File | AP)

Sensex drops over 100 points amid thin global trade

Besides, weakening of the American currency in overseas market supported the rupee, while steady rise in crude oil prices and weak opening in domestic equities weighed on the local unit, forex traders said.

Rupee rises 8 paise to 71.23 against US dollar in early trade

Most Popular

Mukesh Ambani 9th richest on Forbes' real-time billionaires list
Top credit card myths harmful for your financial well-being
Microsoft CEO Satya Nadella tops Fortune's Businessperson of the Year 2019
Employment growth slowed down in last two years: report
GST structure: key challenges and its solutions

Editor's Picks

Income tax e-filers drop by over 6.6 lakh in FY19: Official data
Swiping on your smartphone reveals a lot about you to your social media company
  • Read Financial Chronicle as it appears in print.
  • Subscribe, and get it delivered in the inbox everyday.
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
  • Home
  • About Us
  • Contact Us
  • Terms of Service
  • Privacy Guidelines
  • Copyright © 2019 Financial Chronicle, All rights reserved
Developed & Maintained By Daksham