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Home News Power Sector News UPA speeds up disinvestment- NTPC and REC for sale

UPA speeds up disinvestment- NTPC and REC for sale

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Pranab Mukherjee UPA Government is fast-tracking its disinvestment program. It hopes to change how it uses the funds it gets and wants to make sure that it can use the money to plug the widest fiscal deficit in 16 years. The Finance Ministry is stepping on the gas pedal to sell its stake in big PSUs. After Oil India, India's largest power company, NTPC is on the disinvestment radar and REC, the nodal company for funding power projects in rural areas has also been cherry picked for stake sale. This is not all; there are six more companies in the disinvestment pipeline.

NDTV learnt from sources that 4.75 per cent of government stake will be offloaded in NTPC, while in REC, the government's share will come down by 5 per cent. Over and above this, REC will also be allowed to issue 15 per cent additional shares to boost its equity capital.

Besides, the Finance Ministry is expecting both these proposals to get cabinet clearance in the next 30 to 45 days. In fact from the NTPC disinvestment alone, the Finance Ministry is hopeful of raking in over Rs 10,000 crore.

Companies, which will be actively considered by the Finance Minister for a 10 per cent stake sale, once NTPC and REC are okayed. Significantly, sources have also clarified, there will be no exclusive QIP for the any company in which the government plans to sell stake.

In the meanwhile, the Finance Ministry has worked out a formula for using the disinvestment money to lessen its expenditure budget—the real reason why selling stake has become so important for the government.

According to the formula worked out, the disinvestment proceeds would be split between fund managers and infra spending and would be entirely used for infra spending. There is also a policy decision that National Investment Fund (NIF) will not be dismantled and it will continue to be under the Consolidated Fund of India.


Source - NTDV
 

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