Wednesday, May 13, 2015

Will Modi govt clear NTPC, IOC stake sell in today's CCEA meeting?

Finance minister Jaitley
GIVING a major boost to its ambitious disinvestment move, the Narendra Modi-led NDA government is likely to clear stake sale in over half-a-dozen companies including NTPC and Indian Oil (IOC).
The cabinet committee on economic affairs (CCEA) is expected to take a call on stake sale in these two PSUs on May 13.
A leading daily quoting official sources said the government is looking to sell five percent in NTPC and...
10 percent in IndianOil. This will result in collection of around Rs 14,000 crore based on current market price. Coal India too is back on the disinvestment radar although it is not clear if the 5% stake sale is on the agenda for today's CCEA meeting.
The finance ministry was pushing to sale of stake in IndianOil during the last financial year but had to drop the plan at the last moment as there was no clarity on the subsidy-sharing mechanism.
The petroleum ministry had also argued that the decline in crude prices would have adversely impacted valuations. IndianOil had been taken up as an alternative to selling stake in ONGC, which was on the original list. With oil prices beginning to rise and more clarity on subsidy sharing, the government has revived the IndianOil stake sale. Sources said the government has already put in place a list and the proposal before CCEA on Wednesday is part of the plan.
Stake sale in PSUs is a key element of finance minister Arun Jaitley's plan to boost spending and yet keep the fiscal deficit under check. In his budget speech the minister aims at disinvestment receipts of Rs 69,500 crore for the current financial year.
With stake sale in leading PSUs like NTPC and IndianOil, the government is reducing its reliance on other smaller PSUs to meet the target.

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