In a significant step-up of the divestment programme, the finance ministry is hoping to raise Rs 8,000-10,000 crore (Rs 80-100 billion) during the current fiscal year by selling a part of the government's stake in five public sector units.
Finance ministry officials said apart from Bharat Heavy Electricals Ltd, there were four other PSUs -- Nalco, Maruti Udyog Ltd, PowerGrid Corporation and Shipping Corporation of India -- lined up for divestment this year. The Cabinet had only last week cleared a 10 per cent divestment in Bhel through a public offer.
This fits in with Prime Minister Manmohan Singh's remarks last month that the government would actively pursue public sector divestment after keeping it on the backburner for a year.
The Divestment Development: Complete Coverage
The government's divestment revenue had fallen from Rs 16,953 crore (Rs 169.53 billion) in 2003-04 to Rs 4,091 crore (Rs 40.91 billion) in 2004-05 after the United Progressive Alliance government decided not to follow National Democratic Alliances's aggressive divestment policy when it came to power in May 2004. The Left parties are opposed to any divestment in profit-making PSUs.
The finance ministry has proposed to sell a 20 per cent stake in Nalco and 15 per cent in Shipping Corporation. The ministry intends to sell an 8 per cent stake in Maruti, the officials said.
Based on current listed prices, Bhel shares can fetch the Centre over Rs 2,000 crore (Rs 20 billion), while the sale of a 20 per cent stake in Nalco will help gather another Rs 1,900 crore (Rs 19 billion).
Similarly, the sale of an 8 per cent stake in Maruti can help raise around Rs 1,050 crore (Rs 10.5 billion) and it can hope to generate around Rs 640 crore (Rs 6.4 billion) from Shipping Corporation.
Besides, the government is also bound by the shareholders' agreement to sell its remaining 44 per cent stake in Balco to Sterlite Industries. A 5 per cent stake is reserved for company employees.
The civil aviation ministry has also proposed divestment of the government stake through public offers in Indian Airlines and Air-India. This move is aimed at meeting the cost of the fleet expansion programmes of the two carriers. The finance ministry, however, has not factored in these companies in its calculation of divestment receipts.
The government has not fixed any official divestment target for the current fiscal year as the proceeds from the sale of its shares in public sector companies will go to the National Investment Fund.
The earning from the NIF is proposed to be used for meeting the Centre's social sector expenses as also strengthening public sector companies.
The finance ministry is slated to table a white paper on divestment in the monsoon session of Parliament.