Government will reduce its stake in Indian Oil to less than 51%.

Government will reduce its stake in Indian Oil to less than 51%.

The government plans to reduce its stake in Indian Oil Corp (IOC). The government wants to reduce its stake in the oil marketing company to below 51 per cent. According to Mint, people aware of the matter said that the Narendra Modi government's cabinet will consider the issue. It is possible that the cabinet next week should decide on selling stake in government companies.

The Government of India holds a direct stake of 51.5 per cent in the IOC. Apart from this, IOC and ONGC hold an additional 25.9 per cent stake through LIC. The Narendra Modi government has no way to raise funds due to weak revenue collection. In such a situation, before March 2020, the government has the option to raise Rs 1.05 lakh crore by selling assets.

The government aims to keep 3.3% of the budget deficit GDP this fiscal year. However, if the government fails to raise funds, the fiscal deficit figure may also increase.

According to Live Mint, the government may sell a 26.4 percent stake in IOC. Its value is equivalent to Rs 33,000 crore. However, when finance ministry spokesperson Rajesh Malhotra was contacted for further details, he refused to say anything.

People aware of the matter say that the government will start selling stake in government companies from January next year. The panel of ministers is also expected to take forward the privatization of Bharat Petroleum Corporation, Shipping Corporation of India and Container Corp of India.

Finance minister Nirmala Sitharaman had said in her budget this year that the government would reduce its stake in government companies to below 51 per cent. After this, the government has selected Indian Oil, ONGC, NTPC Ltd and GAIL for stake sale to sell its stake.

IOC shares have fallen 3.8 percent this year. While the Sensex has gained 11.4 percent during this period.