| PSU divestment can lower fiscal deficit by 25 bps: Religare | |
| Press Trust of India / New Delhi June 5, 2009, 14:39 IST | |
A possible fund mobilisation of about Rs 10,000 crore through planned initial public offerings and strategic stake sales in select public sector entities can help the government lower its fiscal deficit by a quarter percentage points in the current fiscal, a report says.
"If the new government manages to mobilise around Rs 10,000 crore through lined up public offers and strategic sales in FY'10, it can lower fiscal deficit by about 25 bps (basis points) Religare Hichens Harrison said in a report adding PSEs which were identified for disinvestment in the past, but were later shelved, may go under the hammer first.
With fiscal deficit ballooning to over six per cent of GDP last fiscal, and is expected to remain high this fiscal as well, divestment "is a large window of opportunity for the next government to bolster its finances," the report said.
"Firstly, there are those PSEs which have filed for a public issue with SEBI, but are yet to see the light of day on the primary markets. These include Rites, National Hydro Power Corp, Bharat Oman Refineries, UTI Asset Management Company and Oil India," the report said, while noting that these five alone have potential to raise over Rs 12,000 crore of funds.
Besides, there are about 25 PSEs recommended by the Disinvestment Committee which can be potential targets of divestment and there are those PSEs which were slotted for disinvestment but for which the process was later called off for various reasons, the report added.
The UPA government has conveyed its intentions to tap the stock market for raising resources through sale of PSU shares while retaining 51 per cent stake in the state-owned firms.
President Pratibha Patil in her address to the joint sitting of Parliament yesterday said: "Our fellow citizens have every right to own part of the shares of public sector companies, while the government retains majority shareholding and control."
"My Government will develop a roadmap for listing and people- ownership of public sector undertakings while ensuring that government equity does not fall below 51 per cent," she added.
The disinvestment process, which came to a virtual halt during the last 3–4 years due to opposition of Left parties, may pick up speed considering the fact that this time the new UPA government has been formed without the Left support.
"If the disinvestment process takes place, stocks belonging to sectors such as logistics, shipping, engineering and construction, oil and gas, metals and fertilizers would stand to gain," the report added.
From 1994–95 till 2007-08 the government had successfully mobilised Rs 46,600 crore through disinvestment and during the NDA government's rule, from 1998–99 to 2003–04, the government raised Rs 33,700 crore via this route.
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