The government’s disinvestment plan, which depends heavily on a proposed 10% sale of its equity in Coal India (CIL), could face a hurdle with the coal ministry being ambivalent to the proposal.
In response to a department of disinvestment (DoD) note, the coal ministry — cautious not to be seen as working against the interest of workers — has not given a clear-cut approval to the proposed disinvestment in the coal major. But it has not said a strict ‘no’ either and left it to the finance ministry to take a call on the modalities and timing of the stake sale.
In a veiled warning, the ministry said the CIL disinvestment would not be easy. It pointed out how CIL workers’ unions had threatened to go on a nationwide agitation when the UPA government tried to push through the share sale in December 2013 and, again, in January this year.
The Modi government has targeted an ambitious R63,425-crore mop-up from disinvestment in FY15. The proposed 10% stake sale in CIL alone is expected to fetch around R24,000 crore, more than a third of the total annual target. Sources said the coal ministry’s response over CIL disinvestment was sent to DoD in the second week of July. While it has put the ball in the finance ministry’s court, officials in the coal ministry said it would soon hold meetings with trade unions to build consensus and take them on board over the proposal.
Sources said there could be an offer for higher quota of government shares to employees at a discounted price. Several CIL employees could not get company shares reserved under the staff quota during its IPO. The last government even thought of providing these employees shares in the company at the IPO price under a special offer programme.