New Delhi, Jan. 11: The finance ministry is aggressively pushing for the sale of its stake in Maruti Udyog and Bharat Heavy Electricals (Bhel) in an attempt to bridge the gaping fiscal deficit.
Finance minister P. Chidambaram has already held discussions with Prime Minister Manmohan Singh to gather support for the proposal to offload a part of the government's stake in the country's biggest carmaker and the largest power plant equipment maker ' the least controversial of the public sector units that can be put on the block.
The government is hoping to raise Rs 2,000 crore from the sale of the stock in these two companies and wants to do so before the financial year closes on March 31.
In the budget for 2004-05, Chidambaram had estimated receipts of Rs 8,077 crore from divestment proceeds, but this looks unlikely at this stage with the Left and other allies of the UPA government stalling such moves in most state-owned companies.
The Left parties are opposed to the privatisation of state-run firms as they fear job losses.
Budget 2004-05 had projected a fiscal deficit of Rs 137,407 crore, or 4.4 per cent of GDP. Chidambaram and finance ministry mandarins are under pressure to ramp up revenues and slash excess spending. In 2003-04, fiscal deficit had soared to 4.8 per cent of GDP.
The government has been planning to sell its remaining 18.29 per cent stake in Maruti Udyog, which is 54.2 per cent owned by Suzuki Motor Corp. The value of the government holding is close to Rs 2,400 crore. The government has a put option on its shares in the carmaker till June.
Maruti Udyog had a blockbuster debut on stock markets in July 2003 when the government sold more than 25 per cent of its holding through an initial public offering.
State-run Bhel, 67.7 per cent owned by the government, is India's biggest electrical engineering firm. The sale of 5 per cent equity is expected to bring in Rs 950 crore.
Shares of both companies rose on the news, with Bhel rising as much as 2.72 per cent to Rs 760.50 and Maruti gaining 2.42 per cent to Rs 434 in a weak market.
The government has already raised Rs 2,680 crore this year from the sale of about 5 per cent stake in the country's biggest power generator, National Thermal Power Corporation Ltd.