Govt identifies ONGC, NTPC, GAIL as options for giving up direct control

Having set the highest-ever disinvestment target of Rs 1.05-lakh crore for the current fiscal, the Modi government is not only looking at selling assets of healthy as well as sick Central Public Sector Enterprises (CPSEs), but also strategic disinvestment in profitable state-run behemoths. The government has identified the biggest energy companies such as Oil & Natural Gas Corp, Indian Oil Corp, NTPC Ltd and GAIL India Ltd as probable candidates for cutting its direct holding to below 51 per cent, Department of Investment and Public Asset Management (DIPAM) Secretary Atanu Chakraborty told Bloomberg.

So far, under India's disinvestment policy, the government's stake in such PSUs has been maintained at above this threshold. But Finance Minister Nirmala Sitharaman proposed to change the status quo in her Budget 2019 speech, saying the government was considering lowering its stake to "an appropriate level" on a case-to-case basis. "Government has also decided to modify [the] present policy of retaining 51 per cent Government stake to retaining 51 per cent stake inclusive of the stake of government-controlled institutions," she added.

This development comes amid the Centre's efforts to keep the budget deficit in check while reviving investments to spur economic growth. "Some of these will happen this year," said Chakraborty, adding that exchange-traded funds are the most attractive route for the stake sales. However, he claimed the government's indirect holding - through arms such as Life Insurance Corp of India - will stay above 51 per cent. DIPAM is currently scouting for consultancy firms for assistance in selling land and building assets of public sector companies and the last date for submission of bids is July 11. In the last two years, five CPSEs have been sold off which fetched about Rs 52,000 crore to the exchequer out of the total Rs 1.90-lakh crore raised through CPSE stake sale. The Centre hopes to garner Rs 5,000 crore from this route this year.

Sushmita Agarwal with PTI inputs

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