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Assocham asks govt to cut its stake in PSUs to 51%

Assocham asks govt to cut its stake in PSUs to 51%
PTI
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First Published: Thu, May 27 2010. 06 40 PM IST
Updated: Thu, May 27 2010. 06 40 PM IST
New Delhi: Industry body Assocham on Thursday said that the government should bring down its stake in 45 state-run firms to 51% for raising over Rs4.5 lakh crore, which could then be used for bridging the fiscal deficit.
“If the government is able to reduce its stake (in companies from sectors like power, banks and oil & gas), over Rs4.5 lakh crore can be generated...,” it said, adding that the amount would not only help the government contain the fiscal deficit but also push up stock markets.
The government has projected a fiscal deficit of 5.5% for 2010-11.
Assocham said that the Centre can divest its stake in 20 banks, including SBI, Allahabad Bank, Bank of Baroda, Canara Bank, IDBI Bank and Punjab National Bank, and garner Rs22,302 crore.
The power sector PSUs that can be subjected to disinvestment are NTPC, PFC, Power Grid and the Rural Electrification Corporation, it added.
“If government bring down its equity to 51% in these four companies, it would earn a revenue of Rs99,044 crore,” it added.
In the oil sector, disinvestment should take place in BPCL, HPCL, Indian Oil, Mangalore Refinery & Petrochemicals and ONGC. The government can generate Rs78,857 crore through this, it said.
The government proposes to raise Rs40,000 crore during the current fiscal from the sale of equity in public sector undertakings, up from about Rs25,000 crore a year ago.
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First Published: Thu, May 27 2010. 06 40 PM IST