With the Government finding it difficult to achieve its Rs 40,000 crore disinvestment target for the current financial year, the Prime Minister Manmohan Singh decided to step in on Tuesday and directed all the administrative ministries to work out viable plans for facilitating stake sale in Coal India ltd (CIl) and BHEl - the two big ticket disinvestment targets of the remaining part of FY14.
The Prime Minister held a meeting of key ministers including Heavy Industries Minister Praful Patel, Coal Minister Sriprakash Jaiswal, Telecom Minister Kapil Sibal and Mines Minister Dinsha Patel - with the aim of discussing the way forward on achieving disinvestment targets. Achieving the disinvestment target is imperative for the Government to restrict its fiscal deficit for this financial year at the budgeted 4.8 per cent of gross domestic product (GDP).
"BHEl, Coal India have been asked to come back with various options. These options are buyback, dividend payments, disinvestment," Finance Minister P Chidambaram said after high-level meeting convened by Singh on disinvestment. He added that the Ministry of Heavy Industries as well as Coal Ministry have been asked to work out the best option for raising proceeds as alternative to disinvestment. The money has to be raised through these options.
Till date in the current financial year, the Government has garnered only Rs 1,326 crore from disinvestment proceeds. It is expecting around Rs 4,000 crore from NHPC's buyback offer and the PowerGrid FPO. Another major candidate in the form of Indian Oil Corporation (IOC) where the Government plans to sell its 10 per cent stake, received a tepid response from overseas investors during its road shows last month, a reason, sources said, forced the Prime Minister to hold the meeting.
After the meeting Coal Minister Sriprakash Jaiswal said that "discussions are underway (disinvestment of Coal India) and no decision was taken". The stake sale of CIl has been hanging fire for long on account of opposition from the trade unions. Besides, BHEl disinvestment is also facing roadblocks of unfavourable market conditions as the company's share price has taken a beating since its disinvestment was approved in 2011.