Comments
The Centre has decided to sell 10 per cent of its shares in Indian Oil Corporation and 5 per cent in NTPC and could get around ₹13,800 crore if the shares are sold at their current price.
After the sale , the Government will be left with a 58.57 per cent stake in Indian Oil and 69.96 per cent in NTPC.
The Government had kicked off disinvestment during the current fiscal year by selling 5 per cent in Rural Electrification Corporation, garnering around ₹1,600 crore. For this fiscal year, the Centre has budgeted raising ₹41,000 crore by diluting its stake in CPSEs, and ₹28,500 crore through strategic divestments — selling over 51 per cent and handing over management. The Cabinet Committee on Economic Affairs, in its meeting on Wednesday, gave ‘in-principal’ approval for disinvestment in these two ‘Maharatna’ companies.
The Department of Disinvestment will finalise the date and then a ministerial panel under Finance Minister Arun Jaitley will approve the floor price for the issues. This is the price at or above which all investors will be required to make a bid.
The proposal is to sell over 24.28 crore shares in Indian Oil. Based on the latest share price of ₹334.45, this could fetch over ₹8,100 crore for the Government. Shares of Indian Oil closed with a marginal gain of half a per cent on Wednesday.
The Government will dispose over 41.22 crore shares in NTPC and, at the latest closing price of ₹138, could get over ₹5,600 crore. Shares of NTPC closed with a loss of around 2.5 per cent.
Disinvestment in both these companies will be executed through the ‘offer for sale’ route, through stock exchanges. Retail investors (those bidding for up to ₹2 lakh) are required to deposit the full amount at the time of the bid, while high net-worth and institutional investors do not have to do so. .
Measures to curb black money
The Union Cabinet has approved the new Benami Transaction (Prohibition) Bill to curb generation and circulation of black money in domestic sectors such as real estate.
This is the second legislation to curb black money after the Lok Sabha approved a bill to initiate action against assets and bank accounts stashed abroad. The new bill will be introduced during the monsoon session.
This is the third legislative effort to prohibit benami transactions. The first law was enacted in 1988. However, despite getting the Presidential assent, successive Governments failed to notify the rules. As a result, the Act could not be made operational. In 2011, the UPA Government introduced a new Bill, which also was vetted by the Parliamentary Committee, but could not be passed. The Bill lapsed after the Lok Sabha was dissolved.
The earlier Act defined benami transaction as “any transaction in which property is transferred to one person for a consideration paid or provided by another person”.
The 2011 Bill listed the reasons why a person does this — to defeat the provisions of law, avoid payment of statutory dues, or to avoid payment to creditors.
The previous bill also diluted the punishment for the beneficial owner or benamidar and any other person who abets or induces any person to enter into a benami transaction and holds benami property.
The 1988 Act stated that whoever entered into a benami transaction could be punished with imprisonment up to three years, which was to up to two years in the 2011 Bill. The fine, however, was retained.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.