News: Disinvestment re-initiated; Govt targets Rs 1500 cr

(PTI 08/02/2007) New Delhi - Overcoming resistance from the Left Parties, government on Thursday virtually re-initiated the disinvestment process by targeting Rs 1500 crore funds for the National Investment Fund through IPOs of three public sector power companies. "The government will be piggybacking on the IPOS of Rural Electrification Corporation (REC), Power Grid Corporation of India (PGCIL) and National Hydro-electric Power Corporation to raise Rs 1500 crore for the NIF, which has no funds currently", Finance Minister P Chidambaram told reporters after a Cabinet meeting. The three PSUs together are targeting to raise Rs 2400 crore, he said adding this was based on the estimated current book value of these unlisted companies. By piggybacking on these IPOs the government hoped to garner funds for NIF, he said. Chidambaram said the External Affairs Minister Pranab Mukherjee had met the CPI-M leaders in January and told them that "no money was flowing into the NIF", the earnings of which are intended for restructuring PSUs and for meeting social sector requirements. "Without getting into disinvestment, if and when IPOs (of these PSUs) are issued we will piggyback a small portion to put it in NIF", Chidambaram said. After the issue of IPOs and the piggybacking on them, the government share in REC will come down to 81.22 per cent, while that in PGCIL and NHPC will be reduced to 86.36 per cent each, the minister said.