The cabinet committee on economic affairs on Tuesday cleared a proposal to offload ten

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per cent of government's equity in state-owned Shipping Corporation of India (SCI) through a follow-on offer.

The SCI at present has 4.23 crore shares. “SCI can issue fresh equity of 10 per cent of its existing shares in the domestic market as per SEBI regulations. A discount of five per cent would be offered to retail investors on the issue price,” said an official news release after a late evening meeting of CCEA. The committee has also sought half per cent reserved for SCI employees. They will get the shares at five per cent discount to offer price.

The government holds 80.12 per cent in SCI. The proposed divestment will bring its holding to 63.75 per cent. The divestment hopes to mobilise about Rs 1,300 crore through SCI follow on offer.

Meanwhile, CCEA has asked government-owned telecom companies BSNL and MTNL to continue procuring 30 per cent of their equipment from government-owned ailing ITI for another two years. This will become operative beginning September 21, 2010.

BSNL and MTNL will give 70 per cent advance against orders placed on ITI so that the company does not face working capital problem to execute orders, an official new release said.

The CCEA decision will help the Bangalore-based public sector utility in its bid for survival. ITI has incurred an accumulated loss of Rs 3,513 crore as on March 31, 2010.

The committee has also given green signal to non-plan budgetary support of Rs 70.76 crore for liquidation of statutory dues of sick public sector companies. It includes provident fund, gratuity, pension and salary during January 1-September 30, 2010.

Sick companies that have been provided relief to clear their statutory dues include Hindustan Cables, HMT, Hindustan Photo Films, Triveni Structurals, Tungbhadra Steel Products, Nepa, Scooters India and HMT Bearings.

For railway employees, the government announced a hefty bonus. The cabinet has approved the proposal of railways ministry to pay productivity linked bonus equivalent to 77 days wages for 2009-10 to all eligible non-gazetted employees. There are about 12.92 lakh non-gazetted railway employees. The railways will have to shell out around Rs 1,065.42 crore towards bonus payment.