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Shares in Life Insurance Corporation (LIC) and IDBI Bank — the two storied, state-owned institutions in the country’s financial sector — will be sold to the public. The surprise announcement in the budget is critical to the financing of government expenditure this year. Some market players expect the LIC stake sale to be the flotation of the decade while Bengal chief minister Mamata Banerjee expressed shock. Finance minister Nirmala Sitharaman has set a divestment target of Rs 2.1 lakh crore — the highest ever. Of this, Rs 90,000 crore is expected to be raised from the sale of the government’s stake in LIC and IDBI. The remaining Rs 1.2 lakh crore will come from the sale of stake in central public sector undertakings like Bharat Petroleum Corporation and Air India. Sitharaman said the government would sell a part of its holding in LIC through an initial public offering (IPO) but did not say how much. Some analysts believe that a successful flotation of the LIC shares would be critica...

A KEY THEME the Economic Survey emphasises across chapters is the importance of wealth creation which, it says, is better achieved through liberalisation of the economy and promotion of the private sector. It highlights several areas from banking to cement and steel where opening up the sectors to private players has led to massive efficiency gains, increased profitability, improved return on assets, and better access and service to customers. On disinvestment, an analysis carried out in the survey shows that strategic sale of majority stake to private players produced much better results, indicating its preference for privatisation of government-owned companies. It argues for the setting up of a holding company structure — on the lines of Singapore government-owned Temasek Holdings — to carry out stake sale in central public sector enterprises (CPSEs). “The aim of any privatisation or disinvestment programme should, therefore, be maximisation of the government’s equity stake value.T...

Business Line December 03, 2019 Publishes By: Twesh Mishra The projections of windfall revenue gains for state governments after the auction of coal mines are turning out to be a pipe dream. According to data shared by the Ministry of Coal, the revenue to Odisha from auctioned coal mines declined annually from 2015-2016 to nil in 2018-2019 and remained nil in the current year, till now. Cumulatively since 2014-2015, when the auctions were conducted, to 2019-2020, the State received just  ₹ 51.57 crore. This amount pales against the  ₹ 45,630 crore that was promised to the State over 30 years, the expected life cycle of the coal mines. The only coal mine in Odisha that started operations also closed down while the rest are yet to get clearances. There is also a lot of variation in the annual revenues accrued to States. In 2015-2016, Jharkhand received  ₹ 133.72 crore as revenue from the auctioned coal mines. In 2016-2017, this amount fell to  ₹ 18.63 cro...

The Telegraph October 10,2019 By PTI in New Delhi The government claimed an additional $175 million as its profit share after the cost disallowance in 2016. In a setback to the oil ministry, the Supreme Court has dismissed its petition against an order seeking disclosure of documents that formed the basis for the levy of $3 billion penalty on Reliance Industries over KG-D6 natural gas output not matching targets. A three-member international arbitration panel, hearing Reliance and its partner’s challenge to the government levying penalty because of unutilised capacity due to production not matching targets, had asked the ministry to share the documents that formed the basis for its actions. The oil ministry first challenged the disclosure before the Delhi High Court, which on December 18, 2018 dismissed the petition. It then challenged it in the Supreme Court, which on August 5, 2019 dismissed it saying it was “not inclined to interfere” with the earlier order. The governm...

Financial Express October 09, 2019 Former officials and telecom experts blame the rigid policies and lack of support from government for the sorry state of affairs at BSNL-MTNL. BSNL-MTNL: India’s largest public-sector telecom operator Bharat Sanchar Nigam Limited (BSNL) seems to be heading towards uncertain times. The public sector telecom giant that made telecom services accessible to rural areas by providing affordable mobile connections in commercially non-viable remote areas has been incurring losses for the last several years, prompting the government to consider its sell-off or even complete closure. BSNL has incurred a cumulative loss of Rs 17,645 crore between 2015-16 to 2017-18 and its loss in FY 2018-19 is pegged at over Rs 14,000 crore. The total loss of BSNL in the last four years has been pegged at close to Rs 32,000 crore. It lead to the reports that the Union government is considering complete closure of the two stressed telecom PSUs – BSNL and MTNL. “...

SWARAJYA  Swarajya Staff October 06, 2019 In the first lot of big-ticket disinvestment, the government is aiming to stake sales of PSUs, including BPCL, SCI and Concor, among others, which have recently been cleared by the Amit Shah-led panel, at the earliest and they could be placed for cabinet approval by November-end. The ministerial panel headed by Home Minister Amit Shah held its first meeting last month. Officials said on Thursday (3 October) that the cabinet approved changes in the sell-off process where DIPAM (Department of Investment & Public Asset Management) becomes the nodal department for all decisions on strategic disinvestment while the other tweak in the process will be pre-bid stakeholder consultation before the government issues EOIs to get the prospective bidders' concerns, doubts and suggestions on board before floating the Expression of Interest (EOI). Roadshows will also be arranged by the DIPAM and the concerned PSU jointly to attract more...

First Post July 16, 2019 Press Trust of India The government is considering to split state-run gas utility GAIL (India) Ltd by hiving off its pipeline business into a separate entity and selling it off to strategic investors, sources privy to the development said. GAIL is India's biggest natural gas marketing and trading firm and owns more than two-thirds of the country's 16,234-km pipeline network, giving it a stranglehold on the market. Users of natural gas have often complained about not getting access to GAIL's 11,551-km pipeline network to transport their own fuel. The sources said that to resolve the conflict arising out of the same entity owning the two jobs, bifurcating GAIL is being considered. While previously selling of the marketing business, possibly to another state-owned firm, was being considered, the government is now mulling on hiving off the pipelines into a separate entity and selling off a majority stake in it, they said. GAIL has multiple ...

The Business Line April 18, 2019 By ASHWINI PHADNIS How has the Indian aviation sector fared over the last five years? Ashwini Phadnis takes a look at the hits and misses The five years of the Modi government saw a lot of attention focused on the civil aviation space. The period saw the domestic aviation market witnessing double-digit growth for 52 months in a row, there were some big-ticket announcements like the UDAN scheme, and there was the passenger charter meant to give more power to the flying public. On the flip side, aviation infrastructure, especially air traffic management, did not keep pace with air traffic demand and towards the end of Modi’s term, all the private airlines were in the red, with there being uncertainty about Jet Airways’ future. Given these developments, and now that the country is in the process of electing a new government, FlightPlan looks at aviation during the five years of the NDA government. According to Diogenis Papiomy...

Deepshikha Sikarwa/Mihir Mishra/ Aug 13, 2018 The government is considering yet another  giant rescue package to make state-owned Air India commercially viable following the  failure of its disinvestment plan earlier this year. This will include a Rs 30,000 crore loan  write-off and a cash infusion of Rs 10,000- 11,000 crore, said people with knowledge of  the matter. Accumulated losses will also be written off as  part of the package that’s being considered by the finance ministry, allowing the company to  clean up its balance sheet, said the people cited above. “Small cash infusions are not  making any dent. We want to put the airline in a commercially viable situation,” said one of  the officials cited above. Sources in the y  aviation ministr said that a decision to work on another bailout for Air India was taken at a meeting in the Prime Minister's Office with an intent to improve the financial and operational s...

Avishek G. Dastidar, August 11,2017 The government aims to roll out the red carpet for the industries servicing foreign tourists by giving such sops as “zero-rate GST” and even reimbursement of certain taxes to tour operators engaged in servicing foreigners. The Ministry of Commerce and Industry has sought comments from relevant ministries to draw up “Action Plan for Champion Sectors in Service” to be finally approved by the Cabinet. One of the focus areas is the meetings, incentives, conventions, exhibitions (MICE) sector, which is fast growing yet nascent in India. The draft Cabinet note proposes to bring Indian players engaged in this industry under a “zero-rate GST” regime if the payments are in foreign exchange, to boost exports. It also proposes to reimburse certain local taxes to bulk tour operators of foreign tourists, so that the benefits can be passed on to the tourists eventually. In an estimated business of $300 billion in the MICE economy in the world, India occupies...

Updated: August 9, 2017 13:00 IST | PTI The government has tweaked the terms of sale of its 51.11 per cent stake in Hindustan Petroleum Corp Ltd (HPCL) to Oil and Natural Gas Corp (ONGC) by including phrases that will help avoid triggering an open offer, an official said. The Cabinet Committee on Economic Affairs (CCEA) had on July 19 granted ‘in-principle’ approval for strategic sale of the government’s existing 51.11 per cent stake in HPCL to ONGC “along with the transfer of management control, which will result in HPCL becoming a subsidiary company of ONGC”. The Department of Investment and Public Asset Management (DIPAM) had on July 21 used the same formulation to invite expression of interest from investment and merchant bankers to manage the transaction. But, since the offer meant transfer of management control from government to ONGC, there was apprehension it would trigger SEBI’s takeover code and compel ONGC to make an open offer to acquire an additional 26 per c...

By: PTI | New Delhi |  Published:August 4, 2017  The government on Friday said it has set up a new exchange-traded fund (ETF), Bharat-22, comprising 22 scrips including ONGC, IOC, SBI and Axis Bank. This will be the second ETF from the government after it raised over Rs 8,509 crore from three tranches of CPSE ETF. Bharat-22 will have a diversified portfolio of six sectors, including energy, FMCG, finance, basic material and industrial and utilities, Finance Minister  Arun Jaitley  told reporters in New Delhi. The 22 scrips include central public sector enterprises (CPSEs), state-owned banks and government’s strategic holding in Axis Bank, ITC and L&T held through SUUTI (Specified Undertaking of Unit Trust of India). “While selecting each of these sectors, we have kept in mind sectoral reforms which have had direct impact on the valuation of these shares… We believe that this ETF will be a fairly successful one,” Jaitley said. ETF functions li...

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