The Hindu Business Line : Oil India, NHPC initial public offer soon, says Finance Secy

(From right) The Finance Secretary, Mr Ashok Chawla, the Revenue Secretary, Mr P.V. Bhide, and the Expenditure Secretary, Ms Sushma Nath, addressing a post-Budget media meeting in the Capital on Monday.

Our Bureau

New Delhi, July 6 State-owned Oil India Ltd and National Hydroelectric Power Corporation (NHPC) will tap the capital market with their initial public offering (IPOs) in August/September this fiscal.

This was stated by the Finance Secretary, Mr Ashok Chawla, at a post-Budget press conference here today.

“Four more companies based on overall framework and design will be identified (for disinvestment) by the Department of Disinvestment in consultation with ministries,” he said.

Mr Chawla also noted that disinvestment would proceed in a phased manner. The Centre expects to realise at least Rs 1,854 crore from the planned ‘offer for sale’ in Oil India and NHPC Ltd.

Commenting on the Budget, Mr Chawla said that the short-term objective of the Budget was to boost economic growth. The Budget has focused on increased public spending and picked up the spaces vacated by the private sector due to the impact of the global economic downturn.

Mr Chawla said he expected the economy to record close to 7 per cent growth in 2009-10. Indian economy grew 6.7 per cent in 2008-09.

On the issue of tax rates, Mr Chawla noted that the time was not ripe for raising rates and going back to the pre-stimulus rates.

Hence, the Government decided to retain median Cenvat rate at 8 per cent and the service tax rate at 10 per cent.

“We have not raised excise duty and service tax rates to the last year level. Only in certain items, the rates have gone up from 4 per cent to 8 per cent,” Mr Chawla said.

Meanwhile, the Centre has not met the excise duty target of Rs 1,37,874 crore that it had set for itself for 2008-09. At the revised estimate stage, excise duty collections in 2008-09 stood at 1,08,359 crore.

The Centre has been unable to meet its excise duty targets in the recent years, especially during the earlier UPA Government regime.

The global economic downturn had compelled the Government to come up with stimulus packages last fiscal and this could be one of the reasons that came in the way of the Government meeting the excise duty target for 2008-09.

The Finance Secretary also noted that the tax relief given to individuals would boost consumption. He also saw fiscal deficit as a percentage of GDP at 5.5 per cent in fiscal 2010-11 and 4 per cent in fiscal 2011-12.

Meanwhile, official sources said that the Finance Ministry has assumed GDP growth of 10.05 per cent for 2009-10. The Budget projections have been made after factoring in this growth rate, they said.

On the direct tax side, while giving away revenues of about Rs 10,000 crore (surcharge on personal income-tax), fringe benefit tax (7,000 crore), the Finance Minister has made good this revenue loss by raising the minimum alternate tax by 5 percentage points.

Riding on expected increase in economic growth, the Budget 2009-10 has also projected a Rs 10,000-crore increase in surcharge on corporate tax. In 2009-10, the Government expects to collect surcharge (corporation tax) of Rs 26,090 crore compared with Rs 16,001 crore in the previous year.