Divestment is on track

The government is confident of exceeding the Rs 4,000 crore disinvestment target for 2004-05.

With initial public offers by the Power Finance Corporation (PFC) and PowerGrid Corporation of India proposed during the current financial year, Disinvestment Secretary R Poornalingam said the government could end the year with over Rs 6,000 crore.

The government was considering diluting its stake in the two power companies through the public issue route, Poornalingam said. A final call on the matter would be taken in the next two-three months, he added.

According to finance ministry estimates, the government had mopped up Rs 2,600 crore through the sale of 5.2 per cent stake in National Thermal Power Corporation (NTPC) and garnered another Rs 1,100 crore through the sale of its equity in some public sector undertakings (PSUs) last year.

"We are yet to take a decision on how much to divest and when. Like NTPC, we will use the public issue route for divestments in PFC and PowerGrid," he said. He, however, added that there had been no decision on the sale of the government's residual stake in Maruti Udyog Ltd.

Finance ministry officials said the United Progressive Alliance government had, however, not put in place any disinvestment policy. A draft policy, which had been put up for the approval of the Union Cabinet, had been returned. The policy had sought to put in place a system of diluting government stake in PSUs using the public offer route.

The public sector character was, however, sought to be maintained and companies with over Rs 500 crore turnover were to be taken up for sale of stake.