PM calls meet to push disinvestment

Committed to keep fiscal deficit under check, Prime Minister Manmohan Singh has convened a high-level meeting on Tuesday to push forward the disinvestment programme with a view to achieve the budgetary target of Rs 40,000 crore (Rs 400 billion) in the current fiscal.

The meeting, according to sources, will be attended by Finance Minister P Chidambaram, and other concerned ministers.  "PM wants to review the progress with regard to disinvestment programme. Issues concerning Coal India, Bhel, Hindustan Zinc and Balco are likely to be discussed," according to a source.

The government has budgeted to raise Rs 40,000 crore from minority stake sale in PSUs in the current fiscal. With eight months of the fiscal over, it has managed to garner only over Rs 1,325 crore (Rs 13.25 billion) through stake sale in six PSUs.

Coal Minister Sriprakash Jaiswal, Heavy Industries Minister Praful Patel and Mines Minister Dinsha Patel are also likely to attend the meeting, sources said. The stake sale of Coal India (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.

The government had originally planned to divest 10 per cent in CIL, but on account of stiff opposition from Unions, it lowered it to 5 per cent or 31.58 crore shares. At the current market price of Rs 274.30 apiece, CIL stake sale could fetch over Rs 8,600 crore (Rs 86 billion).

The government currently holds 90 per cent stake in CIL. Besides, by selling 5 per cent stake or 8.28 crore BHEL shares at the current market price of Rs 158.40, the exchequer could reap in over Rs 1,300 crore.

The government, which currently holds 29.5 per cent stake in HZL and 49 per cent stake in Balco, is looking at exiting from the two firms in which Anil Agarwal-led Vedanta Group holds majority stake. The government had sold controlling stake in these companies between 2001-2003.

The stake sale is top on agenda of the government, which has also budgeted to raise Rs 14,000 crore (Rs 140 billion) by way of residual stake sales in the current fiscal.

Achieving the disinvestment target is critical to keep the government finances on track. Chidambaram has already said the government will not breach the 4.8 per cent of GDP red line drawn for fiscal deficit in this financial year.