Divestment can raise Rs.80,000 crore: Assocham

New Delhi, June 28

The government can raise about Rs.80,000 crore ($16.6 billion) by divesting stake in public sector units, says an industry lobby report.

"Dilution of stake in leading public sector units alone could fetch at least Rs.80,000 crore," the report by Associated Chambers of Commerce and Industry (Assocham) said, adding that this amount could be used to bring down the fiscal deficit burden.

To overcome the immediate deficit, the government may have to borrow Rs.2.4 trillion crore from the market by September, it added.

Even a 10 percent dilution in public sector giants could fetch Rs.60,000 crore and a 20 percent dilution would still leave the government in control of these units, Assocham said.

"NTPC alone could fetch Rs.68,000 crore if the government stake is reduced from 89.5 percent to 51 percent. The four power sector giants together could give Rs.98,000 crore," it added.

It urged the government to adhere to the Fiscal Responsibility and Budget Management (FRBM) Act, maintain a low tax regime and introduce goods and services tax (GST) by next April to narrow the deficit.

The FRBM Act was enacted in 2003 to bring in fiscal discipline, and imposes limits on fiscal and revenue deficits.

"There is no need for accepting a long-term fiscal deficit and deviation from FRBM goals," Assocham added.

Last updated on Jun 28^th, 2009 at 12:33 pm IST--IANS

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