The department of disinvestment (DoD) proposes to raise the annual disinvestment target from the current Rs 10,000-12,000 crore to a whopping Rs 50,000 crore over the next three years.
An internal DoD document dated May 2001, says that the government can raise form Rs 10,000 to Rs 50,000 per annum over the next three years. DoD has charted out a roadmap for privatisation. Under the plan, large stakes should be offloaded in IPCL, National Fertiliser, Videsh Sanchar Nigam and the Shipping Corporation of India in the first year.
In the second year, the major companies on the block include the oil majors, BPCL, HPCL, GAIL and power utility NTPC. In the third year, the government is planning to sell a major stake in ONGC.
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The DoD also plans sale of smaller stakes in other companies including Hind Cables, Air-India, Indian Airlines, Engineers India and RCF in the three-year period.
Despite drawing up ambitious divestment plans, the government has, in the recent past, failed to meet these targets by huge margins. The government has targeted Rs 12,000 crore for the current fiscal. In the first five months, however, it has managed to net only Rs 551 crore through the sale of a 51-per cent stake in Balco. At present, the divestment process is on in IBP and Hindustan Zinc. But the divestment in IPCL is caught in a major policy tangle.
In 1999-2000, the government had set a divestment target of Rs 10,000 crore. The only deal of consequence struck that year was selling 74 per cent stake in Modern Foods to Hindustan Lever for Rs 105 crore.
DoD seems to have scaled up its ambitions in view of the burgeoning fiscal deficit which has been projected at Rs 11,63,140 crore for 2001-2002. The government