India likely to sell shares in state run companies: FM

Union Finance Minister Arun Jaitley on Monday said that India is likely to sell shares in some state-run companies when market conditions improve and added that bad loans in the banking sector will improve for the better.

To discuss various issues, including bad loans and interest rate reduction, in light of RBI lowering its policy rate in September, Jaitley held a meeting with the heads of PSU banks.

He said that India has raised just about USD 2 billion, or less than 20 percent of its divestment target so far this year. Further steps will be taken by the government and the central bank to improve asset quality of state-run banks in a reasonable time.

"Indian banks have been burdened with their highest bad loan ratio in a decade. India will sell shares in some state-run companies when market conditions improve," Jaitley added.

He also mentioned that presently the government struggles to meet its asset sales target that is crucial to help plug its deficit. The performance review meeting of Public Sector Banks (PSBs) highlighted the credit flow to productive sectors to spur economy.