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Need to see how divestment process can move fast, says offficial

Dec 16, 2019, 19:21 IST
PTI
Mumbai, Dec 16 () The government's divestment target of Rs 1.05 lakh crore for 2019-20 is important but stake sale deals should not be closed merely based on the deadline, a top official said on Monday.

There is need to see how the process can move fast, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey pointed out.

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According to DIPAM, the government has garnered Rs 17,364.26 crore through disinvestment transactions in the current fiscal so far against the full fiscal target of Rs 1.05 lakh crore.

Disinvestment proceeds will be critical for the government to stick to its target of keeping fiscal deficit at 3.3 per cent of the GDP in the current fiscal year ending March 31, 2020. Meeting the divestment target has become more critical after the government rolled out Rs 1.45 lakh crore stimulus by way of a cut in corporate tax.

Finance Minister Nirmala Sitharaman had announced plans of Rs 1,05,000 crore of disinvestment receipts for 2019-20 and said that the government will undertake strategic sale of PSUs and also continue to do consolidation of PSUs in the non-financial space.

"The disinvestment target is important but we should not be looking at closing the deals merely based on the March 31, 2020 deadline. We need to see how the process can move fast," he said during a panel discussion at the India Economic Conclave 2019.

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In October, the Union Cabinet approved a new policy under which the DIPAM under the Ministry of Finance has been made the nodal department for the strategic stake sale.

"There are issues of due diligence by investors and market conditions. Also, market value has to be maximised for the public assets. All these considerations are important," Pandey said.

He further said that stake sale is not dependent on a particular way of disinvestment but the government has a bouquet of methods for this.

"We can do it through minority stake sale or through OFS, we also have got ETFs or even listing of enterprises. So all of these things have to be considered for achieving the target. So there is a strategic disinvestment target and of course we want to do it fast but at the same time we have to see how we can maximise it," Pandey added.

According to reports, the government has agreed for sale of its entire 53.29 per cent stake in Bharat Petroleum Corp and its 63.75 per cent stake in Shipping Corporation of India (SCI), 30 per cent in Concor, 100 per cent NEEPCO and 75 per cent in THDC. PSK AA SHW MR MR

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