NEWS
21/11/2019 8:33 AM IST | Updated 21/11/2019 8:33 AM IST

Govt Announces Sale Of Stake In PSUs Bharat Petroleum, Shipping Corp

The government faces tax shortfalls of around Rs 2 trillion in the current fiscal year, making the stake sales critical to relieving the deficit.

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The trademark of Bharat Petroleum Corporation on the cap of an employee at a gas stations. 

NEW DELHI — The government has agreed to sell stakes in five state-run companies, including oil refiner Bharat Petroleum Corp (BPCL), finance minister Nirmala Sitharaman said on Wednesday, a move that could help bridge a widening fiscal gap.

Prime Minister Narendra Modi’s government has also approved the sale of holdings in logistics firm Container Corp of India Ltd and Shipping Corp of India, Sitharaman told reporters after a cabinet meeting.

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India has set a target of raising Rs 1.05 trillion ($14.6 billion) through the sale of state stakes in companies by March 2020. It has reached  Rs 173.64 billion since April by selling minority stakes in government companies.

The government owns 63.75% of Shipping Corp and a stake of 53.29% in India’s second biggest state refiner BPCL, which industry sources estimate could fetch $8 billion to $10 billion.

Sitharaman said management control of BPCL’s subsidiary, Numaligarh Refinery Ltd (NRL), in Assam, will be given to another oil company for consolidation.

The government, which has already announced a plan to sell national carrier Air India, faces tax shortfalls of around Rs 2 trillion in the current fiscal year, making the stake sales critical to relieving the deficit.

Modi’s government has set a fiscal deficit target of 3.3% of gross domestic product (GDP) for the current year, but economists and government sources say this is likely to slip to around 3.8%.

New Delhi also plans to offload stakes in Tehri Hydro Development Corporation India Ltd (THDCIL) and North Eastern Electric Power Corp Ltd (NEEPCO), which the government plans to hand over to state-run power producer NTPC.

India plans to invite international energy firms to participate in the privatisation of state-owned oil companies, oil minister Dharmendra Pradhan said last week.

Separately, the cabinet approved the import of 1.2 million tonnes of onions to curb local price rises, as well as a two-year moratorium for telecom companies to pay their spectrum dues.

(Additional reporting by Aftab Ahmed and Nidhi Verma)