New Delhi: The cabinet on Thursday gave in-principle approval to strategic stake sales in some state-owned companies on the recommendations of the government think tank NITI Aayog.

“Strategic sales will involve a change in management control. Some of these are important units. Since each unit will be considered at its own merit, timing will also be decided accordingly. Valuations will also be done," finance minister Arun Jaitley told reporters after a cabinet meeting.

The government did not disclose the number and names of public sector companies in which it will sell stakes. The companies are a mix of loss-making and profitable units and the government is looking to bring down its stake to less than 50% in some of them.

The department of investment and public asset management, and the ministries under which these companies function, will now draw up a detailed plan for the stake sales, cabinet’s approval will again be sought for each of them separately.

When asked about a timeline for the divestments, Jaitley said the government will not try to push through all the planned strategic sales this fiscal year if it means lower valuations.

The government had budgeted raising Rs20,500 crore from strategic stake sales in the current fiscal year.

In another decision, the cabinet on Thursday approved a 2% hike in dearness allowance for central government employees and pensioners at a cost of Rs5,622 crore per year. More than 10 million former and current government employees will benefit from the move, said an official statement.

Also, in a move to keep sugar prices under check and prevent hoarding, the cabinet extended by six months (till April next year) the central order which allows state governments to fix stock limits.

The cabinet also approved a Rs500 crore package for horticulture farmers, especially apple growers in Jammu and Kashmir.

The cabinet approved setting up an Indian Institute of Science Education and Research (IISER) in Berhampur, Odisha, at a cost of Rs153 crore. IISERs are institutes of national importance that conduct research on frontier science areas.

The cabinet also approved a budgetary support of Rs719 crore to Hindustan Machine Tools Ltd (HMT) for payment of outstanding salaries and other employee-related dues.

In addition, the cabinet approved the closure of the HMT tractor division along with transfer of selected small parcels of HMT land in Bengaluru and Kochi to various government entities.

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