In a series of economic decisions Wednesday, the Centre approved strategic divestment of Bharat Pumps & Compressors Ltd (BPCL) and also gave a nod to the consortium of IOC, Oil India and BPCL to buy a stake in two Russian oil fields for an aggregate of US$ 3.14 billion.
The CCEA also approved Rs 2,256 crore for an IT project, Saksham, meant to integrate tax systems of the Central Board of Excise and Customs (CBEC) with the Goods and Services Tax Network (GSTN).
Giving the green signal to its first strategic disinvestment, the Cabinet Committee on Economic Affairs (CCEA), under the chairmanship of Prime Minister Narendra Modi, gave an “in-principle” approval for strategic disinvestment of Allahabad-based BPCL. The government will sell a substantial portion of its holding in the company and also give up management control.
The CCEA also decided to provide financial assistance amounting to Rs 111.59 crore as non-plan loan to the company, to help it meet statutory dues such as provident fund and gratuity of retired employees and outstanding dues of CISF.
“It will motivate employees and improve the performance of the company. This will put an end to further legal complications and penal action against the company,” a government statement said.
The company had been incurring losses for several years now. According to its financial statement, it incurred a loss of Rs 5.24 crore in the fiscal ended March 2014. The loss in the year 2012-13 stood at Rs 27.9 crore.
In another major decision, the CCEA gave its approval to the consortium of IOC, Oil India and BPCL to acquire 23.9 per cent stake in JSC Vankorneft and 29.9 per cent stake in LLC Taas-Yuryakh Neftegazodobycha from the Rosneft Oil Company, which operates the Vankor and Tass-Yuryakh fields.
While the consortium will pay US$ 2.02 billion for acquiring stake in Vankorneft, it will pay US$ 1.24 billion for the stake in Taas-Yuryakh. Earlier in May 2016, ONGC Videsh Ltd completed the acquisition of 15 per cent stake in Vankorneft for a consideration of US$ 1.28 billion.
“The acquisition will add 8.06 MMTOE to India’s overseas oil and gas asset. It will also provide an opportunity to Indian public sector Oil and Gas companies to absorb newer technologies with Rosneft and British Petroleum (BP). BP acquired 20 per cent stake in Taas-Yuryakh from Rosneft last year,” said the government statement.
In another major decision, the government cleared Saksham for a smooth rollout of the new indirect tax regime from April 1, 2017. The project is estimated to cost around Rs 2,256 crore, which will be spent over seven years.
Set up in 2008, the IT system of the CBEC will not be sufficient to cater to the increased workload expected under the GST regime. The Saksham project will step up the department’s technological capabilities in line with the GSTN, which provides the IT backbone of the new indirect tax regime.