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  • Govt may use 25% disinvestment money on reviving sick units

    Published on February 27, 2012

    New Delhi : The govt is likely to revert to the policy of using 25 percent of the disinvestment proceeds for reviving sick PSUs and recapitalising the profitable ones from the next fiscal.

    The government, according to sources, is likely to take some decision in the forthcoming Budget in this regard as its three-year policy of using entire funds from disinvestment for social sector programmes ends on 31st March 2012.

    An announcement in this regard is likely in the Budget, 2012-13, to be presented by Finance Minister Pranab Mukherjee in the the Lok Sabha on 16th March.

    The earlier stated policy of the government was to utilise 75 percent of the disinvestment proceeds for social sector programmes and the rest for recapitalisation and revival of sick and profitable units.

    However, in view of the global financial crisis of 2008 and the subsequent fiscal pressures, the government changed the policy and decided to use the entire proceeds from this route for funding social sector schemes for three years (2009-10 to 2011-12).

    In 2009-10 and 2010-11 fiscals, the government had raised Rs 23,553 crore and Rs 22,145 crore respectively through disinvestment.

    So far this fiscal, the government has been able to raise just Rs 1,145 crore through stake sale in PSUs.

    The government had to delay its originally envisaged plan for PSU disinvestment due to volatile stock market conditions.

    It had budgeted for Rs 40,000 crore this fiscal but it could garner only Rs 1,145 crore as most of the big ticket sell offs have been pushed to 2012-13.

    PSUs lined up for stake sale include Hindustan Copper, SAIL, BHEL and Oil India.


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