Centre’s disinvestment plan set to get a major boost -Governance Now

Centre’s disinvestment plan set to get a major boost

Thirty cash-rich PSUs including ONGC, NTPC, Power Grid, ONGC Videsh and BHEL will start buying back a portion of their own shares during the year

GN Bureau | August 8, 2016

#BHEL #NTPC #ONGC #PSUs #disinvestment #Power Grid

This financial year promises to be a bumper year for the government when it comes to disinvestment revenue. As many as 30 cash-rich PSUs including ONGC, NTPC, Power Grid, ONGC Videsh and BHEL will start buying back a portion of their own shares during the year, according to the Financial Express. The government is expected to earn around Rs 80,000 crore through this.

According to the report, although all of these are unlikely to materialise in the current financial year, a major chunk of the funds might flow into government coffers before April, 2017. The Centre’s disinvestment target for the year is Rs 56,500 crore. So far, the government has raised Rs 3,183 crore so far in 2016-17 via disinvestment in NHPC and sale of small portions in Indian Oil and NTPC to their employees.

On May 27, the Centre issued a capital restructuring order mandating every central PSU with net worth of above Rs 2,000 crore and cash and bank balance of over Rs 1,000 crore to exercise the option to buy back their shares with effect from FY17. The boards of the PSUs will have to take a decision in this regard by September 30. Even though PSUs can seek exemption from the requirement citing capex and other requirements, no firm has approached the department of investment and public asset management (DIPAM) for such relaxation so far.

Five PSUs — Coal India, NMDC, MOIL, Nalco and Bharat Electronics —are already in the process of buying back a portion of their shares, that could fetch the centre about Rs 13,500 crore. It takes 2-3 months to execute buyback by a firm. Other PSUs likely to join are NHPC, REC, Oil India, Neyveli Lignite, SJVN, Indian Renewable Energy Development Agency, South Eastern Coalfields, Shipping Corporation, Northern Coalfields, Central Coalfields, Mahanadi Coalfields, Western Coalfields, BPCL, Engineers India and Mazagon Dock.

The companies have been asked to buy back shares to the extent they can by the amount equivalent to 25 percent of the aggregate of their fully paid up share capital and free reserves. At end-March 2015, CPSEs had a surplus cash of about Rs 2.55 lakh crore.

Comments

Other News

India’s freedom struggle was shaped by wider Asian political thought

As we mark 80th anniversary of independence, ‘Asianism and the Fall of Empire’ (HarperCollins India) by historian Mithi Mukherjee offers a new perspective on Ind

What is colonialism? A relook at modern history

The Chromatic World Order: The Fiction That Rules Our World By Sajid Mohamed Aakar Books

Monsoon session of parliament adjourns sine die

The Monsoon Session, 2026 of Parliament which commenced on July 20 was adjourned sine die on Thursday. The session provided 19 sittings spread over a period of 25 days. During the session 11 Bills were introduced in Lok Sabha and 2 Bills were introduced in Rajya Sabha. 12 B

Consumer Justice at a Crossroads

Over the past four decades, India`s consumer protection landscape has undergone a remarkable transformation. What began with the Consumer Protection Act, 1986 as a simple mechanism to empower ordinary citizens has evolved into a comprehensive framework capable of addressing challenges ranging from mislea

Doctors, experts call for ban on junk food ads, mandate warning labels

More than 30 doctors, medical scientists and public health professionals have urged the government to take decisive action against the aggressive advertising and marketing of junk food, calling for a watershed ban on advertisements for foods high in fat, sugar and salt (HFSS) and ultra-processed foods (UPF

Asiatic Lion population rises from 523 in 2015 to 891 in 2025

On World Lion Day 2026, environment, forest and climate change Minister Bhupender Yadav celebrated India’s remarkable journey in lion conservation and reaffirmed the country’s unwavering commitment to protecting wildlife and biodiversity. In a post on soc