Nod to NEPA divestment, oil prices to be reviewed on Sep 1

NO BIG DEAL

In an indication that the government is not prepared to yield to the Left parties' demands on the Indo-US civil nuclear deal, the Union Cabinet today approved the disinvestment of its equity in newsprint products maker NEPA Ltd. Besides, oil secretary M S Srinivasan said in Singapore that India would review prices of petrol and diesel on September 1.

Disinvestment and oil price hike are some of the issues where the Left had been able to successfully persuade the government to toe its line.

The government will offload 74 to 100 per cent of its equity in NEPA Ltd in a bid to revive the public sector company that was established in 1956. The Board of Industrial and Financial Reconstruction (BIFR) will locate a joint venture partner in the private sector.

A Bill, called the NEPA Limited (Disinvestment of Ownership) Bill, 2007, will be introduced in the next session of Parliament to enable the government to withdraw from NEPA.

One of India's oldest public sector companies, the Madhya Pradesh-based NEPA Ltd has been a single product company producing only standard newsprint. Leading national and regional newspapers have been its clients.

The government decided to disinvest its equity in the company following operating losses by the company and its high cost structure. Operations were discontinued in 1996-97 and restarted in 1997. It was referred to BIFR in 1998 following a complete erosion of its net worth.

It was decided to disinvest in the company in 2001, and SBICAPS were appointed as managers for the disinvestment. The Cabinet gave its approval to that process today.

In Singapore, oil secretary MS Srinivasan said in an interview that the government would review prices of petrol and diesel on September 1.

Indian Oil, the nation's biggest refiner, and its state-run counterparts may lose as much as Rs 51,000 crore this year from selling fuel at government-controlled prices.

Srinivasan said Indian refiners' margins on each barrel would be "considerably" lower for the three months ending September 2007 because of a decline in crude prices, the depreciation of the Indian rupee and narrower spreads between crude and petroleum product prices.

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Other cabinet decisions

Scheme of providing Phosphatic and Potassic (P&K) fertilisers at a concessional rate approved for another year with some modifications.

Approval to bring amendments in the Payments and Settlements Systems Bill, 2006 to ensure a safe, sound and secure payment system.

Approval for the continuation of Nutritional Programme for Adolescent Girls in 2007-08 in 51 districts.

Three new industrial training institutes (ITIs) to be set up "" two in Sikkim and one in Assam. Funds worth Rs 37 crore for strengthening and modernisation of ITIs in Jammu and Kashmir.

Six National Institutes of Pharmaceutical Education and Research (NIPER) to be set up in Hyderabad, Ahmedabad, Hajipur, Kolkata, Guwahati and Rae Bareily at a cost of Rs 200 crore each over the next five years.