Government may clear NTPC, Indian Oil selloff today

NEW DELHI: The government is expected to provide a thrust to its ambitious disinvestment programme for the current financial year by clearing stake sale in over half-a-dozen companies including NTPC and Indian Oil. The cabinet committee on economic affairs (CCEA) is expected to take a call on stake sale in these two companies on Wednesday.

Sources said the government is looking to sell 5 per cent in NTPC and 10 per cent in Indian Oil, which could help mop up around Rs 14,000 crore based on current market price. Coal India too is back on the disinvestment radar although it is not clear if the 5 per cent stake sale is on the agenda for Wednesday's meeting of CCEA.

The finance ministry was pushing to sale of stake in Indian Oil during the last financial year but had to drop the plan at the last moment as there was no clarity on the subsidy-sharing mechanism. Besides, the petroleum ministry had argued that the fall in crude prices would have adversely impacted valuations. Indian Oil had been taken up as an alternative to selling stake in ONGC, which was on the original list. With oil prices beginning to rise and more clarity on subsidy sharing, the government has revived the Indian Oil stake sale. Sources said the government has already put in place a list and the proposal before CCEA on Wednesday is part of the plan.

Sell-off in state run companies is a critical element of finance minister Arun Jaitley's plan to boost spending and yet keep the fiscal deficit under check. He has budgeted for record disinvestment receipts of Rs 69,500 crore for the current financial year. With stake sale in bluechips such as NTPC and Indian Oil, the government is reducing its reliance on a slew of smaller companies to meet the target.