Govt eyeing Rs 50,000 cr disinvestment in PSUs by FY11

With Prime Minister Manmohan Singh giving green signal for disinvestment, the Union government is looking at raising Rs 50,000 crore through share sale in PSUs by 2010-11, a top official said.

"With the impetus provided by the Prime Minister, we are eyeing an disinvestment to the tune of Rs 50,000 crore in PSUs by 2010-11," Disinvestment Joint Secretary Satish Pradhan told reporters on the sidelines of NMDC's FPO announcement here today.

He said the money collected through disinvestment would be recycled into social sector capital expenditure, "in projects like IITs, hospitals and village roads".

"There is a misconception that this money will be used to meet the salary expenses of government babus, but it is not so," Pradhan said.

The FPO by NMDC, he said is an opportunity for retail buyers to be part of the biggest producer of iron ore in the country, accounting for 11 per cent of iron-ore production.

NMDC has the "best iron-ore deposits with a Fe content of 67 per cent which is the highest in the world", Pradhan said.

He said NMDC shares were currently traded at Rs 425 and the price band for FPO would be slightly less than this.