CCEA may take up NFL divestment, kharif crop minimum price tomorrow

CCEA may also discuss proposal from agriculture ministry to increase MSP of paddy

The Cabinet Committee on Economic Affairs (CCEA) is likely to take up on Thursday a slew of proposals. Among these could be a seven per cent disinvestment in state-run National Fertilizers Ltd (NFL) and fixing a minimum support price (MSP) for kharif crops.

There is also the proposal from YES Bank for $500-million Qualified Institutional Placement (QIP) or Global Depository Receipts (GDR) issue.

The government is looking at divesting its stake by 7.64 per cent in NFL, expected to fetch it Rs 175 crore. At present, it holds 97.64 per cent. Besides the money, the divestment will help the promoter (government) to meet the minimum 10 per cent public shareholding norm stipulated by the market regulator, Securities and Exchange Board of India, for public sector undertakings. The NFL share closed 5.9 per cent down today, to settle at Rs 35.35 on the Bombay Stock Exchange.

Officials said the CCEA was also expected to discuss a proposal from the agriculture ministry to increase the MSP of paddy for the 2013-14 crop marketing season by Rs 60 a quintal. This would be for the common and Grade 'A' paddy, to Rs 1,310 and Rs 1,350 a qtl, respectively. The proposals are in line with recommendations by the Commission for Agricultural Costs and Prices (CACP). If approved, this will be one of the lowest increases in MSP of paddy in the past five-odd years. Some officials said the ministry had also suggested some rise in the MSP for bajra and arhar over the recommendation of the CACP. In its recommendations for the 2013-14 rabi crop, CACP had recommended freezing the MSP of wheat for the crop marketing season starting April. This was overturned by the government because of a sharp rise in diesel prices. The MSP of wheat for 2013-14 was finally settled at Rs 1,350 a qtl, compared to the earlier Rs 1,285 a qtl.