Soon after the trust vote in Parliament on July 22, the finance ministry hopes to push through a series of non-legislative reforms, chief among them disinvestment of minority stakes in around 10 central public sector undertakings by listing them on the stock market.
The ministry may also separately consider a further relaxation in external commercial borrowing norms for the current financial year, senior officials told Business Standard today.
Finance Minister P Chidambaram has asked officials in his ministry to draw up a reform agenda that can be pushed through in the days after the trust vote is cast in Parliament, the sources added.
Against the background of strong jockeying for the votes of independent and small party MPs, the ministry is betting on the United Progressive Alliance to win the trust vote with the help of new allies like the Samajwadi Party.
The government is expected to take advantage of the exit of the Left to push through various legislative reforms in insurance, telecom and pensions.
But given that these will take time to pass through Parliament, the government is betting on several non-legislative reforms that can be pushed earlier.
A meeting to discuss the disinvestment through public issues was held earlier this week and the details like the number of companies, the issue size and the timing will be finalised soon, added officials.
Earlier reports had suggested that the government may divest 5-10 per cent of its equity in around 24 companies such as Rashtriya Ispat Nigam Ltd and Manganese Ore (India) Ltd, Nuclear Power Corporation, Railtel and TCIL, among others.
Officials said the earliest date for the issues to hit the market is September, by which time stock market sentiment is expected to improve. Capital inflows could also improve by then as global crude oil prices stabilise and the domestic price situation eases.
"A few good state-owned companies hitting the market will improve sentiment. In any case, the macro-economic fundamentals of the India story remain strong. We believe foreign institutional investors will see this and reverse the recent trend of exiting the Indian market. Domestic investors are also increasingly playing an important role in the stock market," the officials added.
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