Divestment proceeds to fund PSUs, banks and insurers, says FinMin

Written by Press Trust of India | New Delhi | Updated: Feb 27 2013, 08:23am hrs
The disinvestment proceeds from 2013-14 fiscal will also be utilised to infuse capital into PSUs, banks and insurance companies, Parliament was informed on Tuesday.

The government has decided that the disinvestment proceeds with effect from the fiscal year 2013-14 ... will be used for subscribing to the shares being used by the central public sector enterprises (CPSEs), including public sector banks and public sector insurance companies, MoS for finance Namo Narain Meena said in a written reply in the Rajya Sabha.

The proceeds from disinvestment will be credited to the National Investment Fund (NIF), which was set up in 2005. The fund will be used for preferential allotment of CPSE shares to promoters so that center holding does not go down below 51%.

As much as 75% of the income from NIF is used to finance selected social sector schemes, while the rest is utilised to meet the capital investment requirements of profitable and revivable central PSUs.