The government plans to raise around Rs 18,000 crore from the recently-announced stake sale in THDC India and North Eastern Electric Power Corporation (NEEPCO), a senior government official told Moneycontrol.
"We are expecting around Rs 6,500 crore from sale of North Eastern Electric Power. THDC India is expected to give us another Rs 9,500 crore. After including some premium that would be charged by the government, we are expecting to raise around Rs 18,000 crore," the official said.
The sale is expected to be over by the end of January next year, the official said.
The Cabinet Committee on Economic Affairs on November 20 gave in-principle approval for a disinvesting stake in five blue-chip public sector undertakings (PSUs), including state-owned Bharat Petroleum Corporation.
THDC India, a hydropower company, is a joint venture between the central and Uttar Pradesh governments. The central government holds a 75 percent stake in the company.
The Centre owns a 100 percent stake in NEEPCO, a power producer in the northeast that operates hydro and thermal power stations.
The government has been trying to increase its divestment receipts by pushing through strategic stake sales. For the financial year 2019-20, the government aims to collect Rs 105,000 crore from divestment.
The government's divestment receipts become important from the fiscal deficit standpoint. With lower-than-expected revenue collections from the Goods and Services Tax (GST) and corporation tax cut, the disinvestment proceeds will be key to bridge the revenue shortfall.
In September, the government announced slashing the effective corporate tax rate to 25 percent from 35 percent. The government has pegged revenue foregone from the tax cut at Rs 1.45 lakh crore.
According to official data, GST collections by the Union and state governments fell 5.3 percent year-on-year (YoY) to Rs 95,380 crore in October but grew 3.8 percent sequentially.Note: An earlier version of the copy erroneously mentioned the figures in lakh crore instead of thousand crores. This has been updated. The error is regretted.