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Sinha raises the wind, sets target at Rs 120 billion

BS Bureau

Setting a disinvestment target of Rs 120 billion for the next fiscal in the Union Budget 2001-02, finance minister Yashwant Sinha today flagged off big-ticket privatisation plan of Videsh Sanchar Nigam Limited, Air-India and Maruti Udyog Limited to be achieved during the year.

Sinha also outlined a shift in the government approach to privatisation. "To maximise returns to the government, our approach has shifted from the divestment of small lots of shares to sale of blocks of shares to strategic investors," he said.

In 2000-01, however, the government realised only 25 per cent , i.e. Rs 25 billion, (revised estimates) of its divestment target of Rs 100 billion.

Out of Rs 25 billion, Rs 5.50 billion will come from the strategic sale of Balco and approximately Rs 20 billion came from the restructuring of the four stand-alone refineries. Sinha said that eight non-viable PSUs will be shut-down during the current year.

He said that the government had already approved privatisation of 27 PSUs and restructuring plans of a number of companies including HMT and SAIL. Further, he added that the procedure of privatisation of PSUs has now been considerably streamlined.

Sinha said that Rs 70 billion out of the Rs 120 billion targetted from divestment of PSUs will be used in restructuring other PSUs, providing safety net to workers and reducing the debt burden. The remaining Rs 50 billion amounting to 42 per cent of the estimated receipts will be used in providing additional budgetary support in the plan, primarily in the social and infrastructure sectors which will be contingent on realisation of the anticipated receipts.

Source: Business Standard

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