Public sector banks to get Rs 20K cr from Coal India OFS: Chidambaram

New Delhi: Amid strong opposition from Coal India workers union to the proposed stake sale in the company, Finance Minister P Chidambaram said the disinvestment proceeds of about Rs 20,000 crore from the coal behemoth will be invested in public sector banks.

“I have made it clear and I want to repeat it, if we disinvest 10 percent in Coal India (CIL) we will get say roughly about 20,000 crore, every rupee of that will be invested in the public sector bank or another public sector concern,” said Chidambaram.[caption id=“attachment_921575” align=“alignleft” width=“380”] Disinvestment problems for Coal India. Getty Images[/caption]

An employee union of Coal India had earlier said it planned to go on strike if the government goes ahead with the proposal to sell up to 10 percent stake in the public sector enterprise.

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“Now I told Coal India people every rupee that we get out of Coal India I am willing to put it in the public sector bank…So we are not converting assets into current expenditure. We are converting one asset into another asset,” the minister said.

He further added that the Coal Minister Sriprakash Jaiswal is talking to Coal India unions through his ministry on the issue.

The government currently holds 90 percent stake in Coal India.

“So I think people should understand that value must be monetised and what you gain out of monetisation is being invested in the capital of public sector banks.

“So why should anyone oppose it. In fact, even the ones that take an extreme left-leaning ideology must support it because public sector banks will get more capital,” the finance minister added.

Earlier, Indian National Mineworkers Federation had threatened to go on strike if the government went ahead with its plans to offload further equity in the Maharatna firm.

Four other unions, including the Hind Mazdoor Sabha (HMS) and the Bhartiya Mazdoor Sangh (BMS)–are also opposed to the stake sale.

One of the unions, in a letter to Jaiswal, had said the government last time had assured it will not go beyond 10 percent disinvestment.

Coal India got listed on the bourses in 2010 through an initial public offering in which the government raised Rs 15,199 crore by selling 10 percent stake.

Coal India, which has a cash balance of about Rs 60,000 crore, will be the biggest disinvestment for the government in the 2013-14 fiscal if offloading of equity goes as per plans.

PTI