The Hindu : Oil sector ensures disinvestment target

Online edition of India's National Newspaper
Wednesday, Feb 04, 2004

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Business

Oil sector ensures disinvestment target

By Sushma Ramachandran

NEW DELHI, FEB. 3. The Central Government is relying on sale of residual shares in privatised companies to achieve the Rs. 16,000 crores target for disinvestment proceeds set in the interim budget in 2004-05. In the current fiscal, it has taken credit for an inflow of Rs. 14,500 crores under the same heading assuming that the public issues of the Oil and Natural Gas Corporation (ONGC) and the Gas Authority of India (GAIL) would be completed by the end of March this year.

Disclosing this here in the post-budget press conference, Finance Secretary, D. C. Gupta, said the sale of marginal government equity stake in ONGC and GAIL had been taken into account while estimating receipts for the current financial year. These have been pegged at Rs. 14,500 crores, even higher than the budget estimate of Rs. 13,200 crores for 2003-04. Asked whether the oil sector would be the focus for disinvestment next year to achieve the ambitious target for 2004-05, he said sale of residual government equity in several public sector companies was under consideration for the next fiscal.

Even in the case of non-tax revenues, he said the oil sector accounted for Rs. 2,500 crores of inflow owing to interim dividends received from public sector companies like ONGC, GAIL and the Indian Oil Corporation. He stressed this was nothing new since even last years these companies had given interim dividend to the government.

In the current fiscal, the proceeds for disinvestment were only about Rs. 1,300 crores till last month but the decision to sell 10 per cent government shareholding in ONGC and GAIL has ensured that the target for the year will actually be exceeded for the first time. In addition, the residual stakes of government equity in companies, which have already been privatised, will be carried out within the next two months. These include IPCL, IBP and CMC while the sale of 20 per cent equity stake in Dredging Corporation of India is also on the anvil.

The Union Petroleum Ministry has estimated that the total receipts from the sale of 10 per cent equity stake in ONGC and GAIL would be about Rs. 12,700 crores. This would include Rs. 10,500 crores from the sale of ONGC shares and Rs. 1,700 crores from sale of GAIL shares. This will bring the government stake down to 74 per cent from 84 per cent in ONGC and to 57 per cent in GAIL from 67 per cent.

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