The government could consider transferring at least 51% stake in big state-run companies such as ONGC, Coal India and NMDC to technologically-sound private companies, Vedanta chairman Anil Agarwal said. This, he said, would create employment and maximise generation of revenue for the government. “I am not saying divestment. But, in all the big companies, the government can rope in partners which have technology and equipment from the private sector, and give them 51% stake and retain the remaining 49% stake. The government should concentrate only on profits (from) its share,” Agarwal told FE in an interview. The proposal, if implemented, will lead to increase in production, more job creation and higher flow of funds to the exchequer. It will also help India reduce its import bills by up to 25% within two years. The government currently has a little over 68% stake in ONGC, close to 79% in Coal India and a little less than 75% stake in NMDC. Agarwal said unutilised assets within these companies can also unlock a lot of opportunity.
The NRI billionaire said even as India has better natural resources, higher tax burden imposed by the successive governments has led to subdued production. “If revenue is driven by production, then there will be more production, more job creation and less imports. Almost half of India’s non-service sector GDP equals its imports bills of around Rs 25 lakh crore for oil & gas, fertilisers, chemicals, gold, copper and other metals and minerals. This leads to creation of jobs in other countries. “I have been advocating this for quite some time now. The government has trenmendous assets. When the government loosens up a little, money starts pouring. In the airport sector, it loosened up as a result of which traffic has gone up by 100%,” he said. The billionaire added: “India also has the cheapest mobile rates. All these amazing things have happened because it brought private people. We were given Hindustan Zinc. Earlier we used to import zinc and now, we are exporting.”
Quoting Prime Minister Narendra Modi, he said the government has no business being in business, but added that the process has to accelerate, if India has to eradicate poverty. Agarwal said the government should do away with the capping of iron ore production in states like Goa and instead, encourage production of steel-making raw material to the maximum possible. He added that the import duty on finished aluminium and scrap should also go.