The government today approved the proposal to divest 10% stake in state-owned aerospace firm Hindustan Aeronautics Limited (HAL).
"The Cabinet Committee on Economic Affairs (CCEA) has approved divestment of 10% equity in HAL out of its holding on 100% through an Initial Public Offer (IPO) in the domestic market as per the SEBI rules and regulations," said an official statement. The paid up equity of the so far-unlisted company was Rs 120.50 crore as on March 31, 2012.
The disinvestment was mooted before the CCEA to fund the government's plans to modernise the company for which Rs 20,000 crore would be required over next five years.
Finance Minister P Chidambaram said a restructuring of the HAL board would have to be done prior to the IPO. He added the IPO would be issued only in the next financial year. The government had set up expert groups under former Cabinet Secretary B K Chaturvedi for the restructuring of HAL and is awaiting its report for suggesting measures for strengthening it.
HAL is at present handling key projects for the Indian armed forces such as the development of Tejas light combat aircraft, Dhruv advanced light helicopters, indigenous production of Russian-origin Su-30MKI fighter planes. It is preparing to handle future projects such as the indigenous production of medium multi-role combat aircraft (MMRCA) and fifth-generation fighter aircraft (FGFA), light utility helicopters and multi-role transport aircraft (MTA).
In separate decisions the government today cleared the implementation of 21 integrated textile parks envisaging an investment of Rs 819 crore over the next five years. The Cabinet also approved the third phase of implementation of small-scale projects worth $ 100 million (Rs 540 crore) in strife-torn Afghanistan. The Small Development Projects (SDP) directly impact local communities and support social-economic development and facilitate community life through creation of infrastructure in various sectors including education, health, agriculture. The SDPs were earlier implemented in two phases comprising 101 projects worth around $ 20 mn.
The government today further approved the change in funding arrangement for schemes under the Universal Service Obligation Fund (USOF) including rolling out of a national network for broadband services in the country.
The funding of USOF schemes including the scheme for creation of National Optical Fiber Network (NOFN) would be financed out of the plan allocation for better appraisal, monitoring and performance evaluation. Earlier, the Department of Telecommunications (DoT) proposed to restore the budgetary allocations towards USOF expenditure under Non-Plan Budget to avoid procedural delays and ensure timely allocation of funds.
The USOF was created under the National Telecom Policy, 1999, for providing access of telecom services to people in rural areas at affordable prices.
Through NOFN the government aims to connect and provide broadband services across 250,000 panchayats in the country. "NOFN, which is approved in October 2011, will be completed by December 2013," Chidambaram said.
