Coal India divestment should begin after Diwali: Finance Ministry official

MUMBAI: The government is likely to begin its Rs 43,425-crore divestment programme with the sale of 10 per cent stake in Coal India post-Diwali which may fetch around Rs 23,000-crore to the exchequer.

"Coal India divestment process should begin immediately after Diwali," Financial Markets Joint Secretary Manoj Joshi said on the sidelines of a capital market summit organised by industry body FICCI here today.

However, he quickly added that he is not from the divestment department.

The government plans to sell 10 per cent stake in Coal India Ltd (CIL), the world's largest coal producer. The government at present holds 89.65 per cent stake in CIL.

Shares of Coal India today closed 0.30 per cent higher at Rs 341.35 on the BSE here today. At current market price, 10 per cent stake should fetch around Rs 23,000 crore to the exchequer.

The Cabinet Committee on Economic Affairs (CCEA) last month had approved the disinvestment department's proposal to offload 10 per cent stake in CIL through Offer For Sale (OFS) route.

A successful CIL stake sale will help meet more than half of the total disinvestment target. .

A successful divestment process would help the government contain its market borrowing target of Rs 5.97 trillion or maintain fiscal deficit at 4.1 per cent of the GDP.

To meet its fiscal deficit target, the government has identified four major public sector units to be divested, namely Coal India, Steel Authority of India (SAIL) as well as National Hydro Power Corporation (NHPC), which could fetch the exchequer a total of around Rs 46,000 crore, which would include Rs 18,000 crore expected from the divestment of Oil and Natural Gas Corporation (ONGC).

Buoyed by economic revival and tax collections, the government has likely stuck to its scheduled borrowing programme of Rs 2.3 trillion for the second half of the fiscal, so that it meets the 4.1 per cent fiscal deficit target.