Govt must go ahead with divestment to boost economy: Assocham

Tags: News
Regardless of volatility in the stock market, the government must aggressively go ahead with its disinvestment plan and offload stakes in blue-chip PSUs to strengthen the economy, industry body Assocham said today.

"The best thing is to go and sell the minority stake in some of the best-performing PSUs which will also revive faith of the retail investors which has touched the lowest in the recent past," co-Chairman of Assocham's capital market council Jagannadham Thunuguntla said here.

The sale of shares in PSUs such as Coal India, Indian Oil Corporation and BHEL may be a good way to attract global money. Disinvestment can be an excellent tool from the point of view of strengthening the rupee and stimulating the capital market, he added.

The Budget has set a disinvestment target of Rs 40,000 crore for FY14.

"Of the 20-odd companies identified by the Department of Disinvestment for a 5 to 10 per cent equity sale, Coal India and Indian Oil Corp alone could fetch the government close to Rs 28,000 crore," Assocham President Rajkumar Dhoot said while releasing a report on PSUs and Disinvestment.

The rupee touched an all-time low of 61.21 on July 8. Wholesale prices rose 4.86 per cent in June compared with a 4.7 per cent increase in May.

The rupee's decline could prove to be a "blessing in disguise," Thunuguntla said.

"The rupee depreciation has made the net valuation pretty cheap for foreign investors and it might play out in favour of the Indian assets again. They (FIIs) may return with aggression in that case."

Other PSUs such as Power Grid Corp of India, Engineers India Ltd and National Hydroelectric Power Corp can also help the government raise funds in the current fiscal, Dhoot said.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Amit Shah deserved to be crowned President of India, some say

    The Bharatiya Janata Party is now firmly in the hands of Modi’s alter ego, which in plain English means ‘another side of oneself, a second self’

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

Necessary yet inadequate boost to education

The finance minister, in the very first minutes of his ...

Zehra Naqvi

We must overcome the fear of death

It is the biggest irony that the only thing that’s ...

Dharmendra Khandal

Jawai leopards and locals can coexist peacefully

At first glance, the Jawai landscape seems like a large ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture