FM directs officials to hasten divestment

Raising funds necessary to rein in fiscal deficit

Finance Minister P Chidambaram has asked officials to expedite the process of disinvestment so that state-owned companies could hit stock markets in time and help the government achieve the target of Rs 30,000 crore in the current fiscal.

This direction was given by Chidambaram at a meeting of officials recently during which Economic Affairs Secretary Arvind Mayaram & Disinvestment Secretary Mohammad Haleem Khan were present, sources said.

The meeting, they added, was called to review the progress made with regard to disinvestment and prepare a roadmap for stake sale in PSUs. Although four months have passed in the current fiscal, the government has not been able to come out with a single public issue.

Raising adequate funds from disinvestment, sources said, was necessary to keep in check the fiscal deficit which is facing pressure due to rising food, fuel and fertiliser subsidy bill.

 The government last month deferred the initial public offer (IPO) of Rashtriya Ispat Nigam Ltd (RINL) due to weak stock market conditions. The Rs 2,500-crore RINL issue was originally proposed to hit the markets in July.

The Department of Disinvestment proposes to begin the stake sale process in September. The Union Cabinet had already cleared disinvestment in SAIL.

The stake sale in blue-chips like BHEL, HAL and Oil India is also in the pipeline. Due to uncertain market conditions, the government in the last fiscal raised only Rs 14,000 crore from disinvestment against the target of Rs 40,000 crore.