Govt pegs disinvestment proceeds at Rs 40k cr

The government has upped the revenue target from sale of government equity in PSUs at Rs 40,000 crore in 2010-11 from the Rs 25,000 crore targeted in the current fiscal.

Presenting the Budget for 2010-11, Finance Minister Pranab Mukherjee said, "Listing of Central Public Sector Undertakings improves corporate governance, besides unlocking the value for all stakeholders — the government, the company and the shareholders."

Since last year, ownership has been broad-based in Oil India Limited, NHPC, NTPC and Rural Electrification Corporation while the process is on for National Mineral Development Corporation and Satluj Jal Vidyut Nigam.

The government will raise about Rs 25,000 crore during the current year. "Through this process, I propose to raise a higher amount during the year 2010-11. The proceeds will be utilised to meet the capital expenditure requirements of social sector schemes for creating new assets," he said.

The market capitalisation of five companies which have been listed since October, 2004 has increased by 3.8 times from the book value of Rs 78,841 crore to a whopping Rs 2,98,929 crore, Mukherjee said making a case for broad-basing the disinvestment programme.

According to the Cabinet's decision, all listed profitable PSUs should have a public holding of at least 10 per cent and all profitable unlisted PSUs should be listed. As per the criteria, 60 state-run companies are eligible for disinvestment.

Former Disinvestment Secretary Sunil Mitra had said that the Disinvestment Department expects some of the big PSUs like Coal India, BSNL and SAIL to be disinvested in the next fiscal.

Besides, Engineers India Limited has also got Cabinet's nod to reduce the government's stake.

The Finance Ministry expects the action plan for disinvestment to be ready in the next month.