Maharashtra to raise Rs 3000 cr from market soon

For the first time in the current fiscal

The Maharashtra government for the first time in this fiscal (2004-05) is set to raise nearly Rs 3,000 crore from the market, having refrained in the last three quarters in order to curb its debt burden of Rs 1,10,000 crore.

The state has appointed merchant bankers Kotak and Enam to prepare a concept paper to project the true worth of state-run undertakings such as the Maharashtra State Electricity Board (MSEB).

The soon to be raised market borrowings will be utilised to finance irrigation projects nearing completion (especially in western Maharashtra), clearing payments owed to Hindustan Construction Company (HCC) for the Bandra-Worli sealink project and some drinking water projects in the state.

Confirming this, additional chief secretary OP Gehrotra told Business Standard, "In addition to market borrowings to the tune of Rs 2,000 crore to Rs 3,000 crore, we have also set a target of additional revenue mobilisation target to the extent of Rs 2,000 crore in the last quarter of the current fiscal."

He added that a concept paper was also in the preparatory stage for establishing the true worth of state PSUs. "We are keen to ensure that the true value of state public sector undertakings (PSUs) are reflected correctly and not undermined. Several of these PSUs such as the state roadways department, MSEB, Maharashtra State Seed Corporation and CIDCO reflect a equity capital stake of the state government at sub-Rs 5 crore."

According to him, this was despite the fact that the state government had made huge investments, mostly in the form of grants, in these corporations.

Efforts are on to convert the huge funds invested in these PSUs into additional shareholding for the state while ensuring that further investments translate into increased shareholding of the state government in these PSUs.

"This will result in a large amount of money, accruing to the state government in the form of dividend income from these corporations. Take the case of the City and Industrial Development Corporation (CIDCO) that has huge assets at its disposal. But CIDCO shows Rs 3.95 crore as equity capital invested by the state government. We are trying to correct this anomaly in reflecting the true worth of these PSUs," he said.

Similarly, the Haffkine Institute of Research reflects an equity capital of Rs 8.62 crore, which is the highest quantum of equity capital reflected in a state PSU, followed by the state roadways corporation which reflects Rs five crore of equity capital held by the state.

Subsequent efforts would be at offloading equity shares to the general public, once these PSUs have been adequately strengthened fiscally.