Divestment In The Nation’s Biggest Company May Help The Govt, Which Is Struggling To Meet Its Budgeted Target Of Rs 43,425 Cr, Raise Rs 8,150 Cr
New Delhi : The government is likely to sell 10% of its stake in Indian Oil Corp, the nation’s biggest company, this fiscal to raise about Rs 8,150 crore.
The Department of Disinvestment (DoD) has circulated a draft note for the consideration of the Cabinet Committee on Economic Affairs (CCEA) for sale of 10 per cent out of government’s 68.57 per cent stake in IOC, sources privy to the development told PTI. It sought comments on the proposal from Petroleum Ministry as well as Departments of Expenditure, Public Enterprises and Economic Affairs. Comments of the Law Ministry and Ministry of Corporate Affairs too were sought.
Sources said the plan to sell 24.27 crore equity shares in IOC was mooted after big-ticket disinvestment in Oil and Natural Gas Corp (ONGC) got stuck in subsidy woes.
Finance Minister Arun Jaitley had discussed possible disinvestment candidates in oil sector, other than ONGC, with Petroleum Minister Dharmendra Pradhan on January 8. Government was to sell 5 per cent of its stake in the country’s biggest oil and gas producer ONGC to raise Rs 17,000-18,000 crore. However, the double impact of tumbling global oil prices and the rising subsidy burden has left the ONGC stock battered. It has slipped from Rs 472 in June last year to Rs 343.85 (at close of market today). At current price, the government will get no more than Rs 15,000 crore.
In 2014-15, the government has sold 5 per cent stake in steel major SAIL to garner Rs 1,700 crore.
The government has budgeted revenue of Rs 43,425 crore from sale of government stake in companies in the current financial year ending April, but the disinvestment programme has been lacklustre so far, with SAIL being the only company having been divested in. Blue-chip companies like ONGC, NHPC and Coal India had been lined up for disinvestment.
Sources said disinvestment in ONGC too can happen provided the government is able to rework the subsidy sharing formula.
The Oil Ministry wants the payout by ONGC and other upstream producers like OIL for subsidising LPG and kerosene to be reduced to the extent of the statutory oil cess they pay to the government.