By Satyaki Chakraborty
The decision of the Modi.2 Government to invest a total of Rs. 100 lakh crore in the infrastructure sector during the next five years, is going to give a big boost to the public sector enterprises in the core sectors, especially, steel coal and construction companies. The announcement made by the Finance Minister Nirmala Sitharaman in 2019-20 budget has already geared the leading PSEs to start planning taking the next five years in view.
The overall impact of the budget proposals and investment plans will positively impact India’s public sector enterprises, including those operating in the power generation, rural electrification and petroleum sectors. The public sector engineering companies will also set a boost.
The government expects a total investment of Rs.50 lakh crore to develop the railway infrastructure till 2030. This will benefit all PSEs connected, directly or indirectly, with such development.
The increase in the annual turnover limit from the present Rs. 250 crore to Rs. 400 crore for entitlement of corporate tax of 25 per cent on profit will benefit some medium-scale PSEs.
The disinvestment target has been substantially raised to Rs.1,05,000 crore as against Rs.90,000 crore set in the interim budget and is up 16 per cent year-on-year from last year’s revised collections. As on March, the center had exceeded its disinvestment target for the fiscal year 2018-19.
Against a target of Rs 80,000 crore for disinvestment, the receipts touched Rs 85,000 crore. The government had also exceeded the disinvestment target of Rs 1 lakh crore in 2017-18, mainly on the back of multiple deals like an agreement with ONGC for the strategic sale of its 51.11 percent equity share-holding in HPCL at a consideration of Rs 36,915 crore.
The budgeted estimate for 2017-18 was Rs 72,500 crore, comprising sale of equity in state-owned companies, including strategic sale and was later revised and increased to Rs 1 lakh crore. For 2018-19, DIPAM got a sizeable amount from its marquee Exchange Traded Funds — CPSE and Bharat 22. While Rs 18,729.85 crore has been garnered from two fund offerings of the Bharat 22 ETF in the last fiscal, Rs 26,500 crore has come in from the CPSE ETF.
The government is considering whether its holding can go below 51 percent in certain CPSEs on case-to-case basis. Several stock exchange listed PSEs may be required to make fresh public offering to raise their public shareholding to at least 35 per cent. While the government is firm on disinvestment in Air India, the FDI norm relaxation in the aviation sector may bring foreign investors as well.
Surplus PSE land will be utilised for low cost housing. Several PSEs may be required to monetise such surplus land. This will give huge funds to the cash starved government.
The government announced the creation of a new PSE, New Space India Limited, under the department of space, for manufacturing and marketing of space products. The new CPSE will ensure commercial exploitation and expansion of ISRO products. (IPA service)
Public Sector Got Raw Deal From Budget 