LIC big market player, not only to bailout divestment: Arun Jaitley
Hong Kong: Confident of meeting the "ambitious" disinvestment target of Rs 69,000 crore this fiscal, Finance Minister Arun Jaitley today said the government has moved fast so far and all routes are open on this front, including strategic sale of hotels. He also dismissed suggestions that it was LIC which was bailing out disinvestments and said the state-run insurer invests in public sector issues just like the public offers from the private sector.
"We have an ambitious target for this year. Seven more months of this financial year are left," Jaitley told reporters here at a press conference on the last day of his four-day visit to Singapore and Hong Kong. "In the last two months, we have moved much faster, but markets have been in somewhat turmoil," he said in reply to queries on whether the market conditions would impact the disinvestment drive.
"Do you hit the market when it is unpredictable or do you want it to stabilise? In fact the Indian Oil disinvestment took place on the day of the great fall after devaluation in China," Jaitley said. On queries about LIC being roped in to bail out the disinvestments, the Minister said, "LIC is the largest mover of the Indian stock market and therefore in any public issue also it will have an edge." LIC is not a body which invests only to bail out the government in disinvestment. In the issues by private companies, LIC also participates. It stocks the shares as part of its investments and then sells them at an appropriate time," he said.
On whether the government was open to strategic sales, Jaitley said, "I said in Budget that strategic disinvestment is also something that is on our agenda. The Department of Disinvestment is looking at some of the proposals particularly the hotels. "We are looking at hotels. All routes are open. We are also looking at what to do with the loss making entities." On a question about problems for ECB funding, Jaitley said, "If there are any issues, we will look at them through capital market reforms. That is a sectoral issue and I would not like to comment on that. But ECB is indeed an important source of funding for us. If there are any difficulties that arise, our capital markets division will look at those as when it comes."
When asked on what he expects from RBI on rates, Jaitley said, "Let us leave it to RBI." On RBI powers being curtailed with the new Monetary Policy Committee, he said, "As of today RBI decides and once MPC is there that will decide. You don't know what the composition is going to be. All I can say is that it has made a considerable headway and the government and the RBI are on the same page." Asked about the perception that nothing has moved on the ground, Jaitley said he does not agree with those perceptions. "There is 49 per cent increase in FDI itself. Large projects in India are coming up. In the last two-three months, there have been significant improvement on large projects," he said.