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Govt must sell stake in PSUs to private firms to cut import bill: Vedanta

Vedanta also said the Mines and Minerals (Development and Regulation) Act needs to be amended to make it more attractive

Press Trust of India  |  New Delhi 

stressed assets, Income tax
Illustration: Ajay Mohanty

Mining mogul Anil Agarwal-led has made a strong case for the government selling its majority stake in PSUs such as ONGC and Coal India or transferring their assets to private firms to cut import bill by at least 25 per cent. The suggestion in the form of a full-page advertisement in national dailies came at a time oil regulator DGH has proposed to the petroleum ministry to sell 60 per cent stake in 15 producing oil and gas fields of the (ONGC) and Oil India Ltd (OIL) to private firms. Vedanta, which had acquired 51 per cent government stake in Bharat Aluminium Co (Balco) for Rs 551 crore in 2011 and 64 per cent in Hindustan Zinc Ltd for over Rs 750 crore in 2002- 03, said privatising mineral and hydrocarbon producing PSUs or their assets would lead to 10 times more production. In the advertisement, the firm said: "India is a rich country yet poor." The "fastest" way to raise contribution of metals, minerals and oil and gas in India's GDP from 2 per cent to 7 per cent is "to bring private partners in all government companies such as Kolar, Coal India, Hindustan Copper, ONGC, NMDC and others, with majority stake in the company or at the asset level". Vedanta, which principally was a mining company, ventured into the oil and gas space in 2011 when it acquired Cairn India from its British promoters. While its mining acquisitions have been hugely successful as it turned around both Balco and HZL, its oil and gas business have not met with similar success. Cairn India in 2012 produced 1,75,000 barrels per day (bpd) of oil from Mangala and Bhagyam fields -- the two biggest fields in the prolific Rajasthan block -- and targeted 2,40,000 bpd with the addition of Aishwariya field in 2013. Five years with Vedanta at the helm, the entire Rajasthan block accounted for 1,10,137 bpd of production at the end of 2016-17, according to a company statement of April 11. "As proved in past, this (involving private sector) will lead to 10 times more jobs and 10 times more production with at least 25 per cent reduction in import bill. This can be achieved within two years without allowing any job losses," Vedanta said in the full-page advertisement today. To encourage employees, stock options of up to 5 per cent of equity capital can be offered to them, it said. Vedanta also said the Mines and Minerals (Development and Regulation) Act needs to be amended to make it more attractive. "This requires immediate attention.

It needs to be production oriented and targeted towards 30-40 per cent revenue sharing," it said without elaborating. It wants bauxite mines to be auctioned without delay as India has one of the highest mineral reserves. Also, the cap on iron ore production is expected to help realise Prime Minister's vision of producing 300 million tones of steel in India. "India's geology is better or similar to Australia, South Africa and the Middle-East. With its tremendous human resource, India can produce these minerals using world-class technology with priority to safeguard our environment. "This will save hard-earned forex and will create a separate revenue stream without putting an extra burden of tax. The wealth, thus saved, can be used for developing housing, education, healthcare and employment for all," Vedanta added.

First Published: Tue, December 19 2017. 15:29 IST
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