Government to raise Rs 1,120 cr from divestments in FY10

By Team Vcc (VCCircle.com)

Government plans to divest stake in Rail India Technical & Economic Services, Cochin Shipyard Ltd, among others.

The Finance Minister outlined that the Union government plans to raise Rs 1,120 through disinvestments in FY10. The government is looking to divest its stake in Rail India Technical and Economic Services (RITES), Cochin Shipyard Ltd, Telecommunications Consultants India Ltd

(TCIL), Manganese Core India Ltd and Rashtriya Ispat Nigam Ltd (RINL).

The money raised will be used to fund the fiscal deficit, which finance minister Pranab Mukherjee said is expected to rise to 6.8% of gross domestic product from 6.2% in the last fiscal year.

On disinvestment in public sector undertakings (PSU), the budget said that PSUs "are the wealth of the nation, and part of this wealth should rest in the hands of the people. While retaining at least 51% Government equity in our enterprises, I propose to encourage people’s participation in our disinvestment programme."

The budget also added that "public sector enterprises such as banks and insurance companies will remain in the public sector and will be given all support, including capital infusion, to grow and remain competitive."

Increasing Public Float

Saying that the average public float in Indian listed companies is less than 15%, the finance minister said that he plans to raise threshold for non-promoter public shareholding in a phased manner. "Deep non-manipulable markets require larger and diversified public shareholdings," said the finance minister.