BUSINESS

How India can wipe out fiscal deficit

Source:PTI
June 08, 2009 17:29 IST
The government may mobilise a whopping Rs 4 lakh crore, an amount which may help in wiping out the country's fiscal deficit, by bringing down its holding to 51 per cent in all the listed public sector firms, a report says.

"If the government plans to sell its stake in the listed PSUs maintaining its stake up to 51 per cent, the total amount that can be raised is about $94.77 billion (over Rs 4.46 lakh crore)," SMC Capitals said in a report.

With fiscal deficit rising to $62.26 billion (Rs 2.96 lakh crore) - over six per cent of GDP - last fiscal, taming the ballooning deficit would be on its priority agenda when the new UPA government presents the Union Budget in the first week of July.

"If the government goes ahead with disinvestment plans, the infrastructure sector will be the main beneficiary as the proceeds would be ploughed back into the company," SMC capitals equity head Jagannadham Thunuguntla said.

"It is unlikely that the government would go for divestment in the PSU lenders. Shipping, logistics firms would turn out to be the front runners as the government can mobile more funds by selling less stake," he added.

Addressing the first 15th Lok Sabha session last week, President Pratibha Patil had said, "My government will develop a roadmap for listing and people-ownership of PSUs while ensuring that the government equity does not fall below 51 per cent."

Source: PTI
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