Fin Secy expects robust revenues from divestment this FY

By Siddhartha Singh, edited by Madhumita Sen Choudhury/NewsWire18

The government expects to mop up robust revenues from stake sale in state-owned enterprises during the current financial year ending March, Finance Secretary Ashok Chawla said. Asked if the market has appetite to absorb the numerous public issues planned by the government, Chawla said "Market has enough appetite for good papers, whether public or private. Market is very discerning." The government has already raised Rs 42 billion in the current year via stake sale in initial public offers of NHPC Ltd and Oil India Ltd. The Budget for 2009-10 had set the divestment target at a modest Rs 11.2 billion. Over the last few days, the government has also approved stake sale in NTPC Ltd, Satluj Jal Vidyut Nigam and Rural Electrification Corp . Chawla said macro-economic variables were playing out on expected lines and there was nothing unusual or alarming in the current economic situation. "We are seeing that public spending or stimulus is having its desired impact on growth and index of industrial production and even exports are showing an upward trend," he said.

The Index for Industrial Production jumped to 10.4% in August compared with 7.2% in the previous month. Despite a poor monsoon, the Indian economy is widely expected to grow 6.0-6.5% in the current year on the back of a rapid recovery in domestic demand as corporate earnings improve and more jobs are created. The Indian economy had grown 6.1% in April-June. The Central Statistical Organisation will announce the growth in Gross Domestic Product for July-September on November 30. The government announced a series of fiscal and administrative steps late last year and early this year to spur domestic demand and bring back the economy on a high growth path. The sops included a cut in excise duty and service tax rates and a series of interest rate cuts. Since October 2008, the Reserve Bank of India has cut Repo Rate 425 basis points, Reverse Repo 275 bps and Cash Reserve Ratio 400 bps in a bid to infuse liquidity and spur demand. 

Copyright NewsWire18 Pvt. Ltd. 2007. All rights reserved.