According to some sources: India is all set to vend its stake in SJVN Ltd. and Power Finance Corp. to other government- corporations in deals that may get the federal government about 200 billion rupees that will assist it to curb in the tax shortage growing obstacles of a slippage.
The government is planning to sell its 63.8 percent stake in hydropower producer SJVN to the country’s largest thermal power producer NTPC Ltd. to collect about 80 billion rupees. The other offer being examined will view Rural Electrification Corp. Ltd. purchasing the federal government’s 65.6 percent ownership in Power Finance Corp. Ltd.
In order to help the nation to increase resources to meet its quota shortfall target, the talks of Narendra Modi’s reflect his aim to create larger energy corporations through consolidation. The first such blender occurred the last year when Oil and Natural Gas Corp. obtained the stake of government in state-controlled refiner Hindustan Petroleum Corp. Ltd.
On phone, Amit Mantri, founder of 2Point2 Capital Advisors, said “This is disinvestment by proxy,” Further he said, “By selling the stake in one state-run company to another the government can claim to have monetized its stake. But this is only an optical reduction in fiscal deficit.”
D.S. Malik the Finance ministry spokesman didn’t pick two calls to his phone. The government has only lifted 92 billion rupees so far from resource sales, compared to a target of 800 billion rupees ($11 billion) for the fiscal year ending March 31.