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Govt warns Coal India not to resist stake throw-away

‘If CIL does not go for divestment, then they have to provide us a special dividend,’ Economic Affairs Secretary Arvind Mayaram said.

The CIL disinvestment has been hanging fire because of opposition from the trade unions.

Mayaram's statement that the coal major will have to pay a higher dividend comes as the government makes efforts to meet its Rs 40,000 crore disinvestment target. The government holds a 90 per cent stake in CIL.

It had originally planned to divest 10 per cent in CIL and lowered it to 5 per cent, or 31.58 crore shares, on account of the stiff opposition. At Tuesday’s closing share price of Rs 275.60, the CIL stake sale could fetch over Rs 8,700 crore. The government is also trying to seek higher dividend from other PSUs, which are sitting on huge cash piles. At the end of the 2012-13 financial year, the cash and bank balance of CIL stood at Rs 43,776 crore.

The Finance Ministry has already laid out a road map for disinvestment in the remaining days of this financial year. It includes stake sales in major PSUs such as Indian Oil, Engineers India, Bhel and Hindustan Aeronautics. Although the government had budgeted raising Rs 40,000 crore from public sector undertaking disinvestment, it has so far garnered only Rs 3,000 crore from stake sales in seven PSUs, including Power Grid Corporation of India, Hindustan Copper, National Fertilisers and MMTC.

Receipts from dividend and disinvestment are essential for the government to rein in the fiscal deficit at the targeted level of 4.8 per cent of GDP this financial year.

‘2nd half investment rally to help GDP grow 5% this fiscal’


New Delhi: Encouraged by spurt in investment activities in the later half of the fiscal, Economic Affairs Secretary Arvind Mayaram has said 2013-14 is likely to end with an economic growth of about 5 per cent.

'There are some of the number we are looking at the moment... new investment projects have risen to 4.9 per cent of GDP in October-December quarter from 3.6 per cent in the previous quarter, which means investments are now beginning to take place,' he said.

With increase in investments, he said, the demand for critical inputs like cement, steel and core industries, among others would go up.

'So, to that extent, I think the growth is going to be reflected in this third and fourth quarter and it should reach that level that we are discussing... We expect growth should be around 5 per cent,' Mayaram said.

Stressing his point further, he said, the World Bank in its global economic prospects has projected a growth around 4.8 per cent at the market prices for India.

'At factor prices you will see (growth) higher than at market prices. So it should be more than 5 per cent,' he added.

India's economic growth had slumped to a decade's low of five per cent in 2012-13.  The economic growth (GDP) in the first quarter of 2013-14 was 4.4 per cent and 4.8 per cent in the second. In the first half of the fiscal, growth declined to 4.6 per cent from 5.3 per cent in the corresponding period a year ago. If India is to achieve 5 per cent GDP growth, the economy will have to expand by at least 5.4 per cent in the second half of the current fiscal.
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