India To List Seven State-Run Firms As It Races To Meet Divestment Target
India will list seven state-run firms on stock exchanges as it looks to contain its widening fiscal deficit.
India plans to list seven state-run companies through initial public offerings as it aims to meet its divestment target and contain the risk of a fiscal slippage.
The PSUs will be listed to unlock their potential and enhance their value, Union Minister of Law and Justice Ravi Sankar Prasad said today while announcing the Cabinet decisions taken late on Thursday night.
The seven firms to be listed are:
- Telecommunication Consultant India Ltd.
- Railtel Corporation of India Ltd.
- National Seed Corporation of India Ltd.
- Tehri Hydro Development Corporation India Ltd.
- Water and Power Consultancy Services
- FCI Aravali Gypsum and Minerals India Ltd.
- Kudremukh Iron Ore Company Ltd.
Prime Minister Narendra Modi’s government has been relying at buybacks and dividends to bridge the budget gap. It aims to raise Rs 80,000 crore by divestments. The progress on that front, however, is still slow.
“Disinvestment is way below the budgeted target of Rs 80,000 crore and may result in some slippage,” Devendra Kumar Pant, chief economist at India Ratings and Research, said in a media statement.
India’s fiscal deficit in November widened further after already breaching the budgeted target in October. The data raises questions on the government’s ability to meet its fiscal deficit target for the second year running.
While Finance Minister Arun Jaitley has repeatedly assured that the government is on track to meet its fiscal target for the current year, economists see a rising probability of a higher-than-expected fiscal deficit this year.
The government aims to keep the deficit within 3.3 percent of GDP this year. But Morgan Stanley said a more realistic expectation would be 3.5 percent. “We believe a pickup in revenues in the remaining months (as revenue collection is seasonally better in the latter part of the fiscal) and lumpiness in divestment receipts will help to contain fiscal deficit slippage to 3.5 percent,” Upasana Chachra, chief India economist of Morgan Stanley, had said in a statement.
Key Cabinet Decisions
Space Flight Programme
- India approved a plan to send a three-member crew to space, taking the first step to fulfil Prime Minister Narendra Modi’s promise to make it the fourth nation to send a manned space mission.
- First human space flight demonstration will be be completed in 40 months of the announcement, Prasad said. The Cabinet Committee of Economic Affairs approved Rs 10,000-crore funding for the programme.
Minimum Support Prices
- The government also increased the minimum support price for copra by more than Rs 2,000 a quintal for 2019 season. The MSP of milling Copra to be Rs 9,521 a quintal and that of ball copra to be Rs 9,920 a quintal.
- A National Commission for Indian System of medicine bill will be announced soon. A National Commission for homeopathy bill, too, will be introduced.
- The second bi-annual update report sent by India to the United Nations Framework Convention on Climate Change has been approved.
- Coastal regulation zone 2018, which are standards for construction along the coast, has been approved.