The proposal will allow the government to raise funds by selling its stake in the PSU to the same entity. The government is far short of meeting its disinvestment target of Rs 40,000 crore.

During 2010-11, the government collected Rs 25,978 crore as dividend from public sector enterprises. The target for the current financial year was pegged at Rs 23,495 crore.

Market regulator Sebi has reduced the timeline to 34-44 days, a decision which could facilitate the government in getting closer to its ambitious disinvestment target of Rs 40,000 crore for the current fiscal.

Pressed hard for funds, Finance Ministry officials are meeting the heads of PSUs to persuade them to increase dividend payment to the government.

The Finance Ministry says it expects the public sector units to pay \"good amount\" of dividend in the current fiscal.

Sticking to the disinvestment proceeds of Rs 40,000 crore with barely four months left in the 2011-12 financial year, the government on Friday said it is looking at various options, including the buy-back of shares by PSUs, to meet the target.

The government on Friday said that mopping up Rs 40,000 crore through disinvestment is a \"stiff task\" amid volatility in the capital markets even as it is looking at other options, like buyback of shares by PSUs, to meet the target.

An said that Railway Finance Corporation has also got clearance to raise Rs 10,000 crore through infra bonds, but it will come out with the issue after assessing demand for the NHAI papers.

Tax-saving infrastructure bonds are a good option in the fixed income category. These are issued by infrastructure companies approved by the government and they offer a decent rate of interest plus tax benefits.

Despite volatile stock market conditions, the government plansto raise Rs 40,000 crore through the sale of equity in public sectorenterprises for the 2011-12 fiscal year. Last fiscal, the government raised Rs 22,763 crore through divestment.

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State-run lending agency Power Finance Corp may raise Rs 5,000 crore through a tax-free bond issue, a move that would result in lowering borrowing costs for the company.

The price band at Rs 193-203 per share has been fixed for the issue. The firm is offering a discount of 5 per cent in the issue price to retail bidders and eligible employees.

Rural Electrification Corporation  has recently raised US $500-million through a bond issue in the international market.

The state-run company has already shortlisted merchant bankers for the FPO - Goldman Sachs, JM Financial, DSP Merill Lynch and ICICI Securities will manage the Rs 6,000 crore FPO.

The bonds offered will be in maturities of 10 years and 15 years with a buyback option after five and seven years respectively. The PSU will use the funds for its future projects.

The public issue of secured, redeemable, non-convertible debentures of Rs 5,000 face value each will open for subscription on February 24 and close on March 22.

The government approved follow-on public (FPO) offer of the state-run lending agency Power Finance Corporation worth about Rs 5,732 crore.

The offer comprises 5 per cent disinvestment of the government's share in PFC and raising of 15 per cent fresh equity by the company. It's capitalisation stands at Rs 30,071 crore.

India Infrastructure Finance Company will lend the money to the two government companies as part of its loan refinance business. The firms later lend to infra players at higher rates.