Govt all set to throw away part of IndianOil, EIL stakes this month
8 Jan 2014 6:52 AM IST
The government also proposes to offload equity in Hindustan Aeronautics Ltd (HAL) in March, Economic Affairs Secretary Arvind Mayaram said. ‘This will be very close to Rs 40,000 crore (target). Also in exchange traded fund (ETF), we are going to float some of the PSU shares,’ he said.
Although the government had budgeted raising Rs 40,000 crore by way of public sector undertaking (PSU) disinvestment, it has so far managed to garner only Rs 3,000 crore from stake sales in seven PSUs, including Power Grid Corporation of India, Hindustan Copper, National Fertilisers and MMTC.
As per the road map drawn up by the government, a 10 per cent stake sale in IOC and EIL each is expected to yield Rs 5,000 crore and 500 crore, respectively. It also proposes to mop up Rs 3,000 crore from a 10 per cent stake sale in HAL and Rs 2,000 crore from a 5 per cent stake sale in Bhel.
The other major PSUs on the block include Coal India and RINL. Disinvestment in companies, including IOC and Bhel, has been delayed because of differences among the Finance and administrative ministries over valuation and timing. ‘There is no way to discover what is the best price...If the Sensex was down, we would have considered that it is not a good time,’ Mayaram said. ‘If the stock market is doing well, then there is no reason why anybody should say we will not go to the market.’
Mayaram said the government will also float some PSU shares through the Central Public Sector Enterprises ETF. The ETF is estimated to have a corpus of Rs 3,000 crore. The proposed ETF comprising shares of listed CPSEs would serve as an additional mechanism for the government to monetise its shareholdings in those companies.
Home Ministry yet to send comments on FDI in railways
New Delhi: The Home Ministry is yet to send its response on the DIPP’s Cabinet note that seeks to allow foreign direct investment in the railways sector covering areas such as high-speed trains and infrastructure.
‘The Commerce and Industry Ministry has sent the Cabinet note on the matter long back and despite repeated reminders, the Home Ministry has not yet sent its views. Due to security reasons, their comments are important on the issue,’ an official source said.
‘Restrictions on gold imports will stay, at least till March’
New Delhi: Restrictions on gold imports are likely to continue until at least March-end, notwithstanding an improvement in the current account deficit (CAD) situation.
'Our point is that we need to keep the CAD low. We cannot afford to let it go and therefore, at least for this fiscal, we should not tamper with what the regime is.
'...and whatever is to be considered should be considered in the next year after fully understanding how the CAD will look for the next year,' Economic Affairs Secretary Arvind Mayaram said.
He said his ministry gets various kinds of advice and one view is to open up gold imports as demand has been compressed significantly.
Recently, Finance Minister P Chidambaram too said that some curbs on gold imports should remain in force. However, Reserve Bank Governor Raghuram Rajan favours doing away with the restrictions, which encourage smuggling.
Gold imports fell to 19.3 tonnes in November from a high of 162 tonnes in May in the wake of a series of curbs by both the government and the RBI. The government had increased customs duty on gold to 10 per cent while the RBI linked imports of the metal to exports amid a widening CAD and depreciation of the rupee.
Asked if the restrictions had led to smuggling, Mayaram said there was no 'conclusive evidence' to support the argument.
'What is the total compression in gold we are looking at? About 100-150 tonnes. What are the total seizures you get? It is minuscule.
'So, if you look at the trade off, we need to increase vigilance and surveillance to be able to check any rise in smuggling. But at the same time, we cannot afford to allow CAD numbers to become weak because it has a bearing on how the rupee behaves,' the Secretary added.
As per the RBI, the CAD in this financial year is likely to be in the range of $56 billion as against the lifetime high of $88.2 billion in the previous year.
Although the government had budgeted raising Rs 40,000 crore by way of public sector undertaking (PSU) disinvestment, it has so far managed to garner only Rs 3,000 crore from stake sales in seven PSUs, including Power Grid Corporation of India, Hindustan Copper, National Fertilisers and MMTC.
As per the road map drawn up by the government, a 10 per cent stake sale in IOC and EIL each is expected to yield Rs 5,000 crore and 500 crore, respectively. It also proposes to mop up Rs 3,000 crore from a 10 per cent stake sale in HAL and Rs 2,000 crore from a 5 per cent stake sale in Bhel.
The other major PSUs on the block include Coal India and RINL. Disinvestment in companies, including IOC and Bhel, has been delayed because of differences among the Finance and administrative ministries over valuation and timing. ‘There is no way to discover what is the best price...If the Sensex was down, we would have considered that it is not a good time,’ Mayaram said. ‘If the stock market is doing well, then there is no reason why anybody should say we will not go to the market.’
Mayaram said the government will also float some PSU shares through the Central Public Sector Enterprises ETF. The ETF is estimated to have a corpus of Rs 3,000 crore. The proposed ETF comprising shares of listed CPSEs would serve as an additional mechanism for the government to monetise its shareholdings in those companies.
Home Ministry yet to send comments on FDI in railways
New Delhi: The Home Ministry is yet to send its response on the DIPP’s Cabinet note that seeks to allow foreign direct investment in the railways sector covering areas such as high-speed trains and infrastructure.
‘The Commerce and Industry Ministry has sent the Cabinet note on the matter long back and despite repeated reminders, the Home Ministry has not yet sent its views. Due to security reasons, their comments are important on the issue,’ an official source said.
‘Restrictions on gold imports will stay, at least till March’
New Delhi: Restrictions on gold imports are likely to continue until at least March-end, notwithstanding an improvement in the current account deficit (CAD) situation.
'Our point is that we need to keep the CAD low. We cannot afford to let it go and therefore, at least for this fiscal, we should not tamper with what the regime is.
'...and whatever is to be considered should be considered in the next year after fully understanding how the CAD will look for the next year,' Economic Affairs Secretary Arvind Mayaram said.
He said his ministry gets various kinds of advice and one view is to open up gold imports as demand has been compressed significantly.
Recently, Finance Minister P Chidambaram too said that some curbs on gold imports should remain in force. However, Reserve Bank Governor Raghuram Rajan favours doing away with the restrictions, which encourage smuggling.
Gold imports fell to 19.3 tonnes in November from a high of 162 tonnes in May in the wake of a series of curbs by both the government and the RBI. The government had increased customs duty on gold to 10 per cent while the RBI linked imports of the metal to exports amid a widening CAD and depreciation of the rupee.
Asked if the restrictions had led to smuggling, Mayaram said there was no 'conclusive evidence' to support the argument.
'What is the total compression in gold we are looking at? About 100-150 tonnes. What are the total seizures you get? It is minuscule.
'So, if you look at the trade off, we need to increase vigilance and surveillance to be able to check any rise in smuggling. But at the same time, we cannot afford to allow CAD numbers to become weak because it has a bearing on how the rupee behaves,' the Secretary added.
As per the RBI, the CAD in this financial year is likely to be in the range of $56 billion as against the lifetime high of $88.2 billion in the previous year.
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