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Selloff woes not to affect fiscal deficit

New Delhi, Nov. 14: A shortfall in the country’s privatisation receipts in the financial year to March 2004 will not impact the fiscal deficit, finance secretary D. C. Gupta told reporters while releasing the mid-year economic review.

Gupta said the government would fall short of the target by Rs 7,000-8,000 crore.

“Even if there is a shortfall in disinvestment proceeds then it will not put pressure on the economy as it will be offset by higher tax collections,” he said adding that the fiscal deficit was within the targeted levels.

The government had hoped to raise Rs 13,200 crore through the privatisation of state-owned companies — a process that has been stymied by a Supreme Court ruling that this will require Parliament’s approval — to help contain the fiscal deficit target of 5.6 per cent of gross domestic product (GDP) against 5.9 per cent a year ago.

Gupta also said the finance ministry has sought interim dividends from state-run oil companies and that the actual amount would be worked out in consultation with the oil firms.

In the last financial year, the state-run oil majors had paid Rs 2,687 crore as interim dividend to the government. During the first half of the current financial year, the oil companies had earned Rs 10,300 crore as profits.

The finance secretary said no date had been set for the public offer of equity in Indian Oil Corporation (IOC) and Oil and Natural Gas Corporation (ONGC).

After the Supreme Court stalled the privatisation of Bharat Petroleum and Hindustan Petroleum, the government has been toying with the idea of an equity issue in the two other state-owned oil giants.

Earlier in the day, petroleum minister Ram Naik had said the time was ripe to offload equity shares of oil majors driven by the current boom in the stock market and help reduce the government's revenue deficit.

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