The government plans to reduce its stake in Indian Oil, the country’s largest oil refining company, to less than 51 per cent. However, the government and its companies will retain control over IndianOil.
According to Swarnim Times, the cabinet headed by Prime Minister Narendra Modi will consider selling the stakes of some companies next week. This also includes reducing the stake of Oil India by 51 per cent. The government holds 51.5 per cent stake in Indian Oil and the remaining 25.9 per cent is held by LIC, ONGC and Oil India. Due to lack of revenue collection, the Modi government now has limited options. That is why he is working on a plan to raise Rs 1.05 lakh crore from disinvestment.
If the government fails to meet the disinvestment target, the risk of the fiscal deficit going above 3.3 per cent of GDP will increase significantly. While rating agencies can also downgrade India’s credit score.
The country’s second largest petroleum company will soon move into private hands. The central government is going to sell more than 53% of its stake in Bharat Petroleum Corporation Limited (BPCL). For this, all preparations have been completed by the government.
BPCL is worth 55 thousand crores
The net worth of BPCL is currently 55 thousand crores. The government aims to raise Rs 65,000 crore by selling its entire 53.3 per cent. For this, approval will not have to be obtained from Parliament. Last year, the government pressurized ONGC to acquire HPCL. After this, the government had asked LIC to take over the IDBI bank in the last financial year, after the bank was not able to find an investor for the crisis-hit IDBI Bank. The government has also resorted to exchange traded funds (ETFs) to raise resources under the disinvestment process.
The official said that the cabinet had earlier decided to hold at least 51 per cent stake in PSU companies and now the cabinet will have to take a decision on taking the stake below this level. He said, “The government is preparing a proposal / plan to reduce the stake in select public sector central undertakings (CPSEs) to below 51 per cent.”
The government has secretly abolished the law that has nationalized the company. In such a situation, the approval of Parliament will not be needed to sell the company to private hands. In fact, the Modi government abolished the Repealing and Amending Act in the year 2016 itself. In which 187 obsolete and redundant laws went to the waste basket. In the first week of the december, the government will draw a tender, after which the process will start.
