Fin Min prepares list of companies for strategic sale

The ministry is eyeing Rs 28,500 crore from these sales

The government has prepared a list of public sector units (PSUs) which will be sold to private investors, and from which the government will give up management control, Finance Minister Arun Jaitley said on Wednesday, adding that these PSUs being considered may not necessarily be loss-making.

Jaitley has budgeted Rs 28,500 crore from strategic sales, and Rs 41,000 crore from miniroity stake sales for 2015-16.

"We have a list for strategic sales. You just don't know about it yet... The norm is that if the government exits a company through strategic sales, it will give up management control as well," Jaitley said at a seminar in New Delhi.  When asked about possible strategic sale of loss-making PSUs, as was the belief in markets and the media, Jaitley quipped "Not just loss making", but did not comment further on the issue or reveal the names in the list.

During 2001-02 to 2003-04, the government had gone for strategic sale of companies such as Modern Foods Industries, Bharat Aluminium Company, CMC, Hindustan Zinc, Maruti Suzuki among others. However, subsequently, this path was abandoned before the government revived it for 2015-16.

Strategic sale refers to transfer of a block of shares and management control to a strategic partner.

Asian Development Bank (ADB) on Tuesday had said the government's disinvestment target for 2015-16 appears to be ambitious, as it could only raise half of the resources projected for 2014-15. The government raised only over Rs 26,000 crore out of Rs 58,425 crore disinvestment (direct, residual and SUUTI's stake sale in private companies) projected.

The finance minister also pitched for a low interest rate regime and defended the land acquisition Bill, saying it would benefit the rural India by promoting industrial activity in non-urban centres.

However, he said he would not mount pressure on banks to cut interest rates. "We will not pressure banks to cut rates. We expect them to function in a prudent manner," he said.

Jaitley said he reviewed highway projects on Wednesday. Of 77 projects, 24 have finally taken off, 30 not even started. Others have started, but are facing financing issues.

Concerned over slow growth of manufacturing sector, Jaitley promised to step up public spending on infrastructure, ease entry barriers for overseas investors.

The minister said while the agriculture and services sectors have been doing well, "manufacturing is a challenge" and the government is trying to resolve the "legacy" issues hampering development of infrastructure sector.

"Our manufacturing sector is challenging and it is here that we have to actually invent the key engine of growth. This is an area where countries which overtook us. China is an obvious example. Our concentration, therefore, is on Make in India, ability to try and device various methods of financing infrastructure...this is one area where we need to seriously concentrate on," he said.