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Govt to restart disinvestment programme in October’13

30 Sep 2013 Evaluate

In a move to contain the county’s fiscal deficit within the target limit, the government will restart its disinvestment programme in the month of October. The government had put on hold its disinvestment programme amid concerns over weakening rupee and tapering of the quantitative easing (QE) in the US. At present, disinvestment proceeds are of great importance to the government as it has set target to contain fiscal deficit at 4.8 percent of GDP in the current financial year. However, the government is likely to scale back the disinvestment target for the current fiscal by 10,000 crore to 30,000 crore.

As per the government’s disinvestment plan, 10% stake sale in Indian Oil Corporation (IOC) will start in the first week of October and the offer-for-sale could be wrapped by next month. The government expects to raise around 5,000 crore from IOC issue. The government will disinvestment 4% stake sale in Power Grid Corporation and 10% in Engineers India Limited through a follow-on offer before December 15, helping it to raise around 3,000 crore from these two issues. Further, disinvestment will also take place in Coal India, NHPC Limited and NMDC Limited, which will help the government to raise around 12,000 crore.

 So far this fiscal, the government has raised only Rs 1,325 crore by divesting stake in public sector undertakings include Neyveli Lignite Corporation (NLC), State Trading Corporation (STC), MMTC, and ITDC. The government has raised Rs 23,920 crore through disinvestment in the previous fiscal.

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