The finance ministry has pinned its hopes on a windfall gain from spectrum auction to wriggle out of the impending fiscal hole,after being unable to push forth any disinvestment issues in the first quarter of 2012-13. On Thursday,the Cabinet also deferred a proposal to divest 10.82 per cent stake in state-run Steel Authority of India Ltd.
Sources indicated that the government could get an additional bonanza of at least Rs 15,000 to Rs 20,000 crore from the sale of airwaves in the current fiscal.
We will get to the actual realisation from disinvestment proceeds towards the end of the year. But going by the 3G auction results in 2010-11,we are hopeful that the auction this time too will bring in enough to bridge the deficit,if required, a senior finance ministry official said.
The Union Budget for 2012-13 had pegged revenue from the telecom sector at Rs 58,217.33 crore of which sale of spectrum is expected to bring in Rs 40,000 crore. Another Rs 30,000 crore is estimated from disinvestment proceeds. These two sources of revenue are being seen as essential to contain the fiscal deficit at the targeted 5.1 per cent of the GDP. An Empowered Group of Ministers led by home minister P Chidambaram met on Thursday to discuss the modalities of 2G spectrum auction that is due before August 31. Some finality on this will give the economy a lot of comfort as it faces the threat of a possible downgrade from rating agencies partly due to its fiscal health, the official said.
Volatile markets have already begun to impact the governments stake sale plans. Many public sector companies,including BHEL and SAIL also bowed out of plans to launch follow-on public offers fearing poor investor interest.
Officials said that the Rs 4,000-crore SAIL divestment proposal was not considered by the Cabinet Committee on Economic Affairs as steel minister Beni Prasad Verma was in Tokyo while steel secretary DRS Prasad was not in town. It did not seem prudent to take up the issue when the minister was not present, an official said.
In 2010-11 too,windfall revenue from 3G auction had helped the Centre lower the fiscal deficit from 5.1 per cent to 4.6 per cent after earning Rs 1,08,000 crore from 3G and BWA auction against the budgeted Rs 35,000 crore.
Union Cabinet defers Forward Contract Bill
The Union Cabinet on Thursday deferred the much-awaited Forward Contract Regulation Act (Amendment) Bill amid lack of consensus on the proposed legislation that will give more powers to the commodity regulator FMC.
The FCRA (Amendment) Bill has been deferred, food minister KV Thomas said,without citing any reason. Sources said that the Trinamool Congress had expressed reservations to Prime Minister Manmohan Singh at the last minute that led to deferring of the Bill.