Business Other News 23 Oct 2019 Strategic sale of 11 ...

Strategic sale of 11 biggies likely

FC INVESTIGATIVE BUREAU
Published Oct 23, 2019, 12:40 am IST
Updated Oct 23, 2019, 12:40 am IST
The ambitious target was set by the finance ministry in a meeting with the Prime Minister Office (PMO).
The list was prepared by the Niti Aayog and the department of Investment and Public Asset Management.
 The list was prepared by the Niti Aayog and the department of Investment and Public Asset Management.

New Delhi: The Narendra Modi government has finalised 11 “ailing” public sector units (PSUs) for strategic sale as part of its disinvestment plan. It is aimed at meeting the fiscal deficit target and bringing the country’s economy back on track. The ambitious target was set by the finance ministry in a meeting with the Prime Minister Office (PMO).

The 11 PSUs include Bharat Heavy Electricals Ltd (BHEL), Andrew Yule & Co, ITDC’s Ashok Hotel, Balmer Lawrie Invest-ments and Balmer Lawrie & Co., Mahanagar telephone Nigam (MTNL), Telecommunications Consultant India, Natio-nal Textile Corporation, FCI Aravalli Gypsum and Minerals India, Hindus-tan Copper, MECON, Braithwaite & Co. The list was prepared by the Niti Aayog and the department of Investment and Public Asset Manage-ment.

 

“The government is all set for a series of blockbuster divestments — lining up strategic sales as many as 11 PSUs. Once the Cabinet gives its nod, the strategic sale will take place whenever market conditions are suitable,” a top finance ministry source told DC on Tuesday.

The government has also lined up a host of other PSUs for strategic sales in tranches, including BPCL to foreign and private firms. “Though it is a fact that BPCL’s name does not find mention in the list as of now, first the government will have to take it to Cabinet for its approval,” the source said, adding that privatisation requires the nod of Parliament and as per plan it may sell most of its 53.3 per cent stake to a strategic partner.

 

Other PSUs which have been approved for future disinvestment include Bharat Immunologicals & Biologicals Corporation Ltd, Bharat Earth Movers, National Aluminium Company, National Mineral Development Corporation, Scooters India, Certification Engineers International Ltd, Projects & Develop-ment India, Bridge & Roof Co (India), Engineering Projects (India), Hindus-tan Newsprint Ltd, CCI, Hospital Services Consul-tancy Corporation (India), Pawan Hans, National Projects Construction Corporation, ITDC Hotels (for long-term lease of 50 years).

 

The idea is to meet the budgetary shortfall arising out of the recent tax exemption announcement. This will be apart from the off-budget dividend of around Rs 58,000 crore from the Reserve Bank of India (RBI), already in the government’s kitty. The Centre also plans to give some of the hotels, which are currently being managed by ITDC Hotels, on joint venture basis to its strategic partner. “These hotels include Dony Polo Ashok (Itanagar), Punjab Ashok, Ashok Hotel (New Delhi), Hotel Janpath (New Delhi), Hotel Samrat (New Delhi), Lalitha Mahal Palace Hotel (Mysore), Hotel Jaipur Ashok (Jaipur), Hotel Jammu Ashok (Jammu) and Hotel Patliputra Ashok (Patna)," the source added.

 

Earlier this month, a group of secretaries cleared strategic sales in Bharat Petroleum Corp Ltd (BPCL), BEML, Container Corporation of India (Concor) and Shipping Corporation of India (SCI). Stake sales in THDC India and Neepco, both power companies, have also been approved. These could be taken over by state-run NTPC.

Eight other PSUs have been lined up for disinvestment in the second tranche, including Bharat Pumps & Compressors, Central Electronics, Ferro Scrap Nigam, Hindustan Fluorocarbons, Container Corporation of India, Hindustan Prefabs, MMTC/STC, and three units of SAIL (Bhadrawati, Salem and Durgapur).

 

In the third phase of tranche, the PSUs likely for disinvestment include Dredging Corporation of India, Hooghly Dock & Port Engineers, Kamrajhar Port, Shipping Corporation of India, HLL Lifecare, Indian Medicines & Pharmaceuticals, RITES, IRCON International, Karnataka Antibiotics & Pharmaceuticals, Hindustan Antibiotics and Bengal Chemicals & Pharmaceuticals.

The source said that Air India and its subsidiaries would come under the disinvestment programme in the fourth tranche.

“Those subsidiaries of Air India include Air India, Air India Charters, Air India Air Transport Services, Allied Air Services, Air India Engineering Services and Hotel Corporation of India,” the source said.

 

These sales will help the government as it plans to raise Rs 1,57,000 crore against the budgeted divestment of Rs 1 lakh crore in this financial year, for helping to bridge the fiscal gap arising out of the Rs 1.45 lakh crore tax stimulus offered to the corporates. Therefore, the Centre has decided to line up CPSEs for strategic sale in five tranches over the next few years.

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