Finance minister Nirmala Sitharaman (Mint file)
Finance minister Nirmala Sitharaman (Mint file)

Consolidation of PSUs to continue, says Sitharaman in budget speech

  • Disinvestment target raised to 1.05 trillion for the current fiscal year, against 80,000 crore for 2018-19
  • The government has set an ambitious task of becoming a $5-trillion economy by 2024-25

New Delhi: As part of the National Democratic Alliance (NDA) government’s focus on streamlining operations across public sector units (PSUs), state-run firms’ consolidation will continue, finance minister Nirmala Sitharaman said in her budget speech on Friday.

This comes in the backdrop of the disinvestment target being raised to 1.05 trillion for the current fiscal year, against 80,000 crore for 2018-19.

As part of the NDA government’s disinvestment policy laid down by the then finance minister Arun Jaitley in Budget 2017, Oil and Natural Gas Corporation (ONGC), which accounts for 73% of India’s oil and gas output, acquired the government’s stake in Hindustan Petroleum Corporation Ltd (HPCL) for 36,915 crore last year. In March this year, Power Finance Corp Ltd (PFC) completed the purchase of a controlling stake in state-run peer REC Ltd to create an $80-billion lending giant by assets. PFC paid 14,500 crore to the Union government to buy a 52.63% stake in REC.

Also, the acquisitions of Satluj Jal Vidhyut Nigam Ltd (SJVNL) by NTPC Ltd has been on the Department of Investment and Public Asset Management’s (DIPAM's) radar for some time now. NTPC is expected to pay around 8,000 crore for acquiring the government’s 63.79% stake in SJVNL.

The NDA government has set an ambitious task of becoming a $5-trillion economy by 2024-25. In 2014, a concept paper on the possibility of a merger of all state-owned hydroelectric companies recommended a phased approach, starting with North Eastern Electric Power Corp Ltd (Neepco) to be combined with NHPC Ltd, followed by THDC India Ltd and SJVN Ltd.

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