Updated: November 21, 2019 7:20:54 am
The NDA government Wednesday decided to privatise three big PSUs — downstream oil major BPCL (excluding Assam-based Numaligarh Refinery Ltd), cargo mover Container Corporation of India Ltd and shipping company Shipping Corporation of India Ltd — through strategic sale and transfer of management control.
It will also offload its entire stake in power companies THDC India Ltd (74.23 per cent) and NEEPCO (100 per cent) and transfer management control to state-owned power producer NTPC Ltd.
Briefing mediapersons after a meeting of the Cabinet Committee on Economic Affairs, Finance Minister Nirmala Sitharaman said the CCEA also gave in-principle approval to pare down government state in select Central Public Sector Enterprises (CPSEs) to below 51 per cent while retaining management control.
In her Budget for the current year, Sitharaman set a disinvestment receipt target of Rs 1,05,000 crore compared with Rs 80,000 crore in 2018-19. Market analysts said it will be a challenge for the government to complete the strategic sale of the three companies before the financial year ends on March 31, 2020.
In BPCL, the government will sell its 53.29 per cent holding, and in Shipping Corporation of India the stake sale will be 63.75 per cent. In CONCOR, the government will sell 30.8 per cent out of its total stake of 54.8 per cent. Sources said the Centre wants to retain 24 per cent stake in CONCOR given its importance in the railway sector, but will transfer entire management control to a private player since its remaining stake will be below the critical threshold of 26 per cent.
Even as the government will sell its stake in BPCL, the latter’s 61 per cent stake in Numaligarh Refinery in Assam will be transferred to another government entity. “A carve-out plan has been made for Numaligarh Refinery. It will be moved out of BPCL and transferred to a government company,” Sitharaman said.
Alongside this decision, in a major relief to telecom service providers facing financial stress, the government deferred receipt of spectrum charges but companies will have to make these payments along with interest as specified during the spectrum auction. Following the Supreme Court order on adjusted gross revenue-related payments, the Cabinet has not provided any relief so far as it is being looked into by the administrative ministry.
Telecom companies opting for deferment of spectrum payments will have to submit a bank guarantee for the revised amount payable to the government. The Cabinet has approved a two-year moratorium on spectrum auction instalment dues. The deferred amounts can be spread equally on the remaining instalments, to be paid by the telecom companies without increase in the overall time period.
Sources said through these stake sales, the government may raise a total of around Rs 1 lakh crore. These funds will enable it to meet expenditure requirements while sticking to the fiscal deficit target of 3.3 per cent GDP by March-end 2020. The government, however, did not clarify whether stake sales can be done within this financial year.
“The resources unlocked by the strategic disinvestment of these CPSEs would be used to finance the social sector/developmental programmes of the Government benefiting the public. The unlocked resources would form part of the budget,” the government said.
The CCEA also approved amendments proposed in the Toll Operate Transfer (TOT) model by National Highways Authority of India (NHAI). Public funded national highway projects which are operational and have toll revenue generation history of one year after the Commercial Operations Date or COD shall be monetized through the TOT Model. NHAI has already monetized one bundle of projects under TOT Model, generating a revenue of Rs 9,681.50 crore for the government.
“Around 75 operational national highway projects have been identified for potential monetization using the TOT Model, and bundled into 10 separate bids to attract economics of scale for the private sector. The corpus generated from proceeds of such project magnetisation shall be utilized by the government to meet its fund requirements regarding future development and O&M (operations and management) of highways in the country. The Model would facilitate efficient toll realization through private sector,” the government said.
Further, the Cabinet approved introduction of the Industrial Relations Code, 2019 in the Parliament, which will enable setting up of two-member tribunal (in place of one member) while introducing a concept that some of the important cases will be adjudicated jointly and the rest by a single member resulting in speedier disposal of cases.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines