?Confident of meeting divestment target?

The finance ministry has reiterated that it will be able to meet the divestment target of R40,000 crore set for the current financial year even though it has seen only a handful of PSUs hitting the market with share sales.

?The share sales will happen…We will be able to meet the target,? economic affairs secretary Arvind Mayaram said, when asked if the government will be able to achieve the target.

He, however, refused to elaborate on the manner in which stake sales would be executed.

With only four months left in the current fiscal, the government has been able to garner less than 4% of the divestment target.

As part of its attempts to bridge the fiscal deficit gap, the government has set FY14 disinvestment target at R40,000 crore, of which it has raised only about R1,300 crore by selling stake in MMTC (R560 crore), Neyveli Lignite (R358 crore), Hindustan Copper (R260 crore) and three other state-owned firms.

The stake sales were also necessitated in order to comply with the capital market watchdog’s regulations on minimum public shareholding norms.

According to the guidelines, government stake has to be brought down to 90% in all listed PSUs. The coming month, however, is expected to see at least a couple of government offerings.

To start with, the government will raise around R1,600 crore by diluting its stake in Power Grid Corporation of India. The share sale will comprise a fresh issue and an offer for sale (OFS). The government also plans to raise a sizeable chunk of money by diluting its stake in Coal India apart from a few other PSUs.

Meanwhile, speaking at a seminar on developing the bond market, Mayaram said that the government will meet its 4.8% fiscal deficit target, saying ?it will stick to its borrowing programme but will calibrate debt sales according to the market conditions?.

?The red line on fiscal deficit (of 4.8%) is sacrosanct and will not be breached, therefore, we are trying to maximise revenues… I cannot say what estimate (of expenditure cuts) it would be because there is still another six months left. I would be able to tell you an estimate around March 20,? he said.