THE SENIOR ANALYST
Jan 2014
(FDI inflows will be dried up as corporate will be
unwilling to venture in to our country)
Thus in a nutshell it will have a cyclical impact
over the country and will further deter the
economic growth and issue must be addressed on
an immediate basis.
reduced by Rs.10000 crore for 2012-13. This was
due to the market volatility in the preceding year
and a relatively higher tax revenue realization for
the same period. The only issue bothering now
the Government is it had almost realized the
most from its prized possessions and now it is left
with the likes of little known CPSE’s like STC,
MOIL. Thus jury is still out to see whether
investors will be interested in these stakes or
not?
KNIGHT in shining armor
CASH-stash at NIF
Central Public Sector Enterprises (CPSE) were
indeed the Government’s knight as they were
financially able and institutionally under its
control. Thankfully due to resolute domestic
consumption and timely stimulus the Elephant
economy had marched on to attain up to 7.8% in
Q4’08. Taking cue from the bullish economy,
Government has initiated a slew of institutional
reforms like increased taxes and disinvestment in
the CPSE to shore up the fiscal deficit.
Government was able to garner about Rs.61319
crore of cash from this exercise of disinvestment,
which has left it with a dilemma of putting these
proceeds on a right use. The resultant was a
National Investment Fund (NIF) where this money
was stashed. As per the policy framework of this
fund, 75% of the income of the fund will be used
to finance schemes for addressing social issues of
education, health and employment. The
remaining 25% will be used to meet the capital
investment requirements of both the profitable
and the revivable CPSE’s with expectations of
Increased money supply will cause price
inflation (CPI has reached to more than
10% over the years)
Exhibit#2 depicts Government’s budgeted target
of disinvestment versus the actual revenue
realized over the period of 2010-13.
Year
Target
(Crore)
Actual
(Crore)
Actual
(%)
greater returns.
Names of the Companies Divested
(Rs. in Cr)
2010-11
40000
22144.21
55%
Rs.1062.74 SJVN, Rs.959.65 EIL, Rs 15199.44 CIL;
Rs.3721.17 PGCIL ; Rs. 618.75 MOIL;Rs. 582.45 SCI
2011-12
40000
13894.05
35%
Rs.1144.55 PFC,Rs. 12749.5 ONGC
2012-13
30000
23956.06
80%
Rs. 124.97 NBCC,Rs. 807.03 HCL, Rs. 5973.27 NMDC, Rs.
3141 OIL, Rs. 11456.78 NTPC,Rs.310.15 RCF,Rs.627.84
NALCO,Rs. 1514.50 SAIL
2013-14
40000
1325.27
3%
Rs.571.71 MMTC. Rs.259.56 HCL, Rs.101.08 NFL,
Rs.30.17 ITDC, Rs.4.54 STC, Rs.358.21 NLC
Overall
150000
61319.59
41%
Major-CIL,ONGC,PFC,PGCIL,OIL,SAIL
EXHIBIT#2 (http://www.divest.nic.in/)
A closer look into the Exhibit will make us
understand that the disinvestment target was
To address the transparency issues and growing
discontent in CPSE employees, Government on
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