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Selloff drill on fast track

New Delhi, Dec. 2: Prime Minister Manmohan Singh has summoned a high-level meeting tomorrow to give stake sales in state-owned firms a push to meet the Rs 40,000-crore budgeted target.

“The PM will review the progress on the divestment programme, try to sort out the differences and formulate a strategy for stake sale in the remaining fiscal. Issues concerning Coal India, Bhel, Hindustan Zinc and Balco are likely to be discussed,” officials said.

The meeting will be attended by finance minister P. Chidambaram, coal minister Sriprakash Jaiswal, heavy industries minister Praful Patel and mines minister Dinsha Patel and the administrative ministries of the public sector units concerned.

The government has budgeted to raise Rs 40,000 crore from minority stake sale in PSUs in the current fiscal.

It has so far raised Rs 1,325 crore from divestments in MMTC, Hindustan Copper, National Fertilizers, ITDC, State Trading Corp and Neyveli Lignite.

The department of disinvestment has also lined up sales in Indian Oil, Coal India, NHPC, Bhel and Engineers India in 2013-14.

Coal India and IOC stake sales are crucial for the government to meet the 2013-14 divestment targets, which is Rs 55,814 crore, inclusive of the planned residuary stake sales in Hindustan Zinc and Balco.

“I have said and I repeat it: this year the fiscal deficit will be contained at below 4.8 per cent of the gross domestic product no matter what requires to be done,” Chidambaram had said earlier last month.

He also referred to the fiscal deficit target as the “red line”, which will not be breached. Fiscal deficit is the difference between what a government earns and what it spends.

But the situation seems to be getting more and more difficult. Data released by the Controller General of Accounts show that between April and October this year, the fiscal deficit touched 84.4 per cent of the annual target. The target for the year is Rs 542,999 crore.

During the first seven months, it was at Rs 457,886 crore, or 84.4 per cent of the target, indicating that Chidambaram has very little room left to manage the fiscal deficit.

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