New Delhi: The government on Thursday approved a public offer to sell 10.82 percent of its stake in steel major SAIL and demerger of surplus VSNL land into a separate company — a decision that may fetch over Rs 10,000 crore to the exchequer.
The Union Cabinet also decided to impose 21 percent duty on imports of power equipment, a move to protect domestic companies from cheap Chinese shipments but it disappointed the
private power generation companies.
The government also deferred for the second time considering a Bill that seeks to amend an existing Act to give more powers to commodity markets regulator FMC.
Official sources said the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Manmohan Singh, cleared SAIL public offer. The share sale process, proposed
to be conducted through auction route or offer for sale, isexpected to fetch over Rs 4,000 crore to the government, they added.
The Disinvestment Department will decide on the timing of the issue depending upon market conditions. The government currently holds 85.82 percent stake in SAIL. Shares of SAIL
closed at Rs 93.10, down 0.16 percent over previous close. Due to the poor market conditions, the government has not been able to launch the Rs 30,000-crore disinvestment programme for the current fiscal so far. A few days ago, it had put on hold the initial public offer (IPO) of Rashtriya Ispat Nigam Ltd (RINL) due to volatility in the markets.
Sources further said that “demerger of surplus land of VSNL has been approved”. This issue has been pending since Tata Communications acquired the PSU in 2002 as the land
assets owned by VSNL were not part of the deal. The surplus land has been lying unused.
The land is estimated to fetch Rs 6,150 crore to the exchequer.
The demerger of 773.13 acres, spread over at least five locations including Delhi, Chennai and Pune, was proposed to be carried out through HPIL, a Special Purpose Vehicle formed
through a Cabinet decision in 2005. The DoT has proposed government taking 51.12 percent stake in Hemisphere Properties Ltd (HPIL.)
A proposal to hike sugarcane price that mills pay to farmers by 17 percent to Rs 170 per quintal for 2012-13 was also approved.
“The Cabinet Committee on Economic Affairs (CCEA) has approved the hike in the Fair and Remunerative Price (FRP) of sugarcane to Rs 170 per quintal for 2012-13 marketing year (October-September),” sources said.
The government also decided to defreeze the import tariff value on refined palm oil and link it to the global prices, a move aimed at curbing higher import of refined cooking oil and protect the domestic industry.
Tariff value is the base price on which custom duty is determined and is aimed to check under-invoicing by importers. It is fixed every fortnight on the basis of global prices. However, since July 2006, the government has kept unchanged the tariff value on refined palmolein at $484 per tonne as against the current global price of $1,000.
In another decision, the term of Justice M B Shah Commission, which is probing the issues of illegal mining of iron and manganese ore, was extended by another year.
The one-man Justice Shah Inquiry Commission needed more time to visit 6-7 states including Odisha, Jharkhand, Chhattisgarh, Karnataka and Madhya Pradesh to complete the inquiry, according to sources.
State-owned BHEL also said the government’s decision to impose higher duty on imported power equipment will help improve the competitiveness of domestic manufacturers. “The move to impose higher import duty on power equipment is definitely good and in the right direction. It will help in improving the competitiveness of domestic manufacturers,” said BHEL Chairman and Managing Director B P Rao.
According to him, the real benefit of imposing higher levy on overseas gear would be only about four percent.
Private power producers said, however, the move will push electricity tariffs on account of costly equipment. It will increase the cost of power. The government has
only gone by the protection of domestic equipment makers. They have not really addressed the concerns of private power generation companies,” Association of Power Producers (APP) Director General Ashok Khurana said.
Meanwhile, sources in the Trinamool Congress (TMC) said Mukul Roy in his letter had requested the Prime Minister to defer he Forward Contract Regulation Act (Amendment) Bill as no one from TMC would be present in Delhi today due to the
The Bill is essential for the development of commodities market as it aims to strengthen the regulator FMC by providing financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices.
TMC, a key constituent of the UPA, also said it wants more discussions on the Bill before it is cleared, they added.