India Plans to Sell a State-Company Stake Next Month, Khan Says
India said it may sell a stake in a state company next month as the government tries to raise 300 billion rupees ($5.4 billion) to help narrow the widest fiscal deficit among the biggest emerging markets.
“I am hopeful that I should be able to do something in September,” Disinvestment Secretary Mohammad Haleem Khan told reporters in New Delhi today. “Meeting the disinvestment target should not be a problem because we have enough in the pipeline and my team is working on other cases.”
Share sales are part of the government’s plan to pare the budget gap to 5.1 percent of gross domestic product in the year ending March 2013. India’s struggle to limit the deficit as slowing growth crimps tax revenues and subsidies spur spending has led Standard & Poor’s and Fitch Ratings to warn they may strip the nation of its investment-grade credit rating.
India plans to sell stakes in 15 companies, including about 10 percent in Steel Authority of India Ltd., the nation’s second-biggest producer, Thomas Mathew, joint secretary for capital markets in the finance ministry, said on June 18.
Prime Minister Manmohan Singh’s government projects record borrowing of 5.69 trillion rupees this fiscal year even as it strives to narrow the budget gap from 5.8 percent in the 12 months ended March. Last year, India raised about one-third of its 400 billion-rupee asset sale target, according to data compiled by Bloomberg News.
The budget shortfall is the widest among the so-called BRIC nations, which also include Brazil, Russia and China.
India will find it difficult to stay with its plan of 9 percent annual GDP growth from 2012 to 2017, Finance Minister Palaniappan Chidambaram said separately in parliament in New Delhi today. First-quarter growth slowed to a nine-year low of 5.3 percent.
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