CCEA clears proposals for divestment in ONGC, Coal India, NHPC

10 September 2014

The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, today cleared proposals for divestment of part of government's stake in ONGC, Coal India and NHPC, to raise a total of Rs43,000 crore.

"Disinvestment proposals of ONGC, Coal India and NHPC have been cleared by the Cabinet Committee on Economic Affairs," an official source said after a meeting of the CCEA.

The government had, last year, deferred a planned sale of stake in Coal India (CIL) following stiff opposition from trade unions. The government, which holds an 89.65 per cent stake in CIL, however, extracted Rs19,000 crore from the coal major as dividend during the year.

CCEA has cleared the sale of a 10 per cent stake in CIL, 5 per cent in ONGC and 11.36 per cent in NHPC through the Offer For Sale (OFS) route, sources said.

At current market price, the sale of shares in state-owned CIL, ONGC and NHPC could fetch the exchequer over Rs23,000 crore, Rs18,000 crore and Rs2,800 crore, respectively, helping the government meet its disinvestment target of Rs43,425 crore for this fiscal.

Besides, the government expects to raise another Rs15,000 crore from sale of residual stake in the erstwhile government companies.

The government had mobilised Rs15,820 crore in 2013-14  through sale of stake in public sector firms, against a divestment target of Rs40,000 crore.

Earlier, in 2012-13, it had raised Rs23,957 crore in stake sale against a target of Rs30,000 crore, while in 2011-12, it could raise only Rs13,894 crore against a target of Rs40,000 crore.

The CCEA meeting, chaired by the Prime Minister Narendra Modi also approved the proposal for providing non-plan budgetary support of Rs287.67 crore for liquidation of statutory dues (provident fund, gratuity, pension, Employees State Insurance and bonus) and salary and wages from 1 September 2013 to 31 March 2014 for eleven central public sector enterprises (CPSEs) under the department of heavy industry.

These include Hindustan Cables Ltd, HMT Machine Tools Ltd, HMT (Watches) Ltd, HMT (Chinar Watches) Ltd, Nagaland Pulp and Paper Co Ltd, Triveni Structural Ltd, Tungbhadra Steel Products Ltd, Nepa Ltd, HMT Bearings Ltd, Hindustan Photo Films Limited and Heavy Engineering Corporation Ltd.

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