GOVT TARGETS Rs 15k cr FROM DISINVESTMENT

SELLOFF PLAN TO BE READY BY MID-AUG

Borrowing Schedule To Be Finalised Today

THE government will come up with a road map for the sale of its stake in public sector companies by mid-August, finance secretary Ashok Chawla said.
    He also said the finance ministry and the Reserve Bank of India would finalise the government's borrowing programme for the financial year on Thursday. The government will have to raise more than Rs 4 lakh crore this year to finance the highest fiscal deficit on record.
    "We will have a clear road map in the next three or four weeks ... The government will retain 51%, but the road map for disinvestment in terms of actual companies ... is being worked out," he said at a Budget discussion organised by industry body CII.
    While Mr Chawla declined to give the exact amount that will be raised through disinvestment in the current fiscal, another government official said the road map could target raising Rs 15,000 crore in current fiscal, depending on market conditions. The Economic Survey had recommended an annual disinvestment target of Rs 25,000 crore.
    The public sector firms that figure in the road map include NHPC, Oil India and Tyre Corporation. Disinvestment in NHPC and OIL India alone is expected to fetch around Rs 3,500 crore. The finance ministry had, on Tuesday, held discussions with officials of some ministries to finalise the road map.
    "The ministries have been consulted. They are going to look at what is feasible, what percentage is to go when. There is a certain process which takes time," he said. Govt to borrow Rs 15k cr each week till September
MR CHAWLA said the government plans to borrow Rs 15,000 crore every week till September as part of its effort to front load most of the current fiscal's total borrowing of Rs 4 lakh crore, or 40% of the total expenditure of over Rs 10 lakh crore. This is to leave room for private sector borrowers in the second half of the fiscal year, he said.
    "As the economy revives, we hope it will in next three months or so, there will be demands for more borrowing by other players and therefore, we are trying to borrow more directly at this stage," he said.
    The RBI will support the government through open market operations to meet its funding requirements and the effort is to ensure that private companies are able to find enough funds at the right cost. After the interim Budget, the government and RBI had come out with an indicative calendar for market borrowings for the first half and had pegged the requirements at Rs 2.41 lakh crore. Out of this, close to Rs 1.65 crore has already been borrowed.
    Mr Chawla said there is enough liquidity in the system and market had good appetite which was evident from bond yields. The benchmark 10-year bond yield, which touched an all-time low of 4.86% in early January, rose to 7.37% by mid-March, its highest since November 2008, on concerns that the government will borrow heavily to fund economic growth. At present, the 10-year bond is hovering at 6.81%.
    He also ruled out any plan to roll back tax cuts till there is firm economic recovery.
    Mr Chawla said the government would pursue financial sector reforms that have been in the offing. To ensure better targeting of subsidies, the government was carrying out a systemic reappraisal to make them merit-based, he said.