The TARP was an initiative by the US Treasury to stabilise the financial system during the global financial crisis by buying mortgage-backed securities and investing in common shares of troubled companies.
The government completed its 52% stake sale in REC to Power Finance Corporation for Rs 15,000 crore in FY19 while its 51.1% stake sale in HPCL to ONGC for Rs 36,915 crore had taken about six months in FY18.
Probable reasons as analysed by transaction adviser EY for non-receipt of bids last year included the government’s decision to retain 24% stake and corresponding rights, high amount of allocated debt and profitability track
Among the most prominent PSUs where the government’s direct stake is only marginally above 51% at this stage and where it could reduce it to boost its non-debt capital receipts are Indian Oil, GAIL (India), Nalco and Engine
Some of the companies identified for strategic disinvestment by NITI Aayog might also be shut down as buyers have not showed interest. These include Engineering Project (India), Hindustan Prefab and Hindustan Fluorocarbon.
The sources added that the hosuing and urban affairs ministry wrote to ULBs last week, asking them to seize the opportunity to introduce the much-needed governance reforms in municipalities by tapping the market
While private consumption and gross fixed capital formation (investment) have seen sharp declines in recent quarters, government consumption spending, though a relatively smaller constituent of the GDP, largely remained stead