CPSEs MMTC, NMDC, BHEL and MECON, along with Industrial Promotion and Investment Corporation of Odisha Ltd and Odisha Mining Corporation, will sell their respective stakes in Neelachal Ispat Nigam Limited to a strategic buyer.
Sections within the government as well as leading market players have noted that LTCG has not yielded much in terms of revenue. The tax was imposed after direct intervention by Prime Minister Narendra Modi seeking financial market players to make a fair contribution for nation building.
The government has cleared plans for complete sale of its equity in BPCL, Shipping Corporation of India Ltd and Air India, while approving majority stake sale in Container Corporation of India Ltd (CONCOR) along with transfer of management control.
As uncertainties surround the financial system — especially in the backdrop of failure of large institutions like IL&FS, DHFL, PMC Bank and some smaller NBFCs — banks are yet to fully pass on the rate reductions to customers.
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.
While Moody’s has maintained the country ratings and only lowered the outlook, it still poses risks of capital flight unless the government improves its fiscal health materially through aggressive stake sale in state-owned companies.
The notification will allow existing consortium of lenders and the existing resolution professional to take the financial service provider or the NBFC to the NCLT and seek a resolution plan that is binding on all parties.