Cabinet Decisions: Government To Sell Stake In BPCL And Four Other PSUs, Defers Telecom Spectrum Payments
Catch all live updates on today’s Union Cabinet meeting chaired by Prime Minister Narendra Modi.
KEY HIGHLIGHTS
Cabinet Approves Strategic Divestment Of 5 PSUs, Provides Relief To Telecom
The Union Cabinet has approved strategic divestment of its stake Bharat Petroleum Corporation Ltd. and four other public sector units. It has also provided relief to the financially stressed telecom sector by deferring spectrum auction payments for two years.
Finance Minister Nirmala Sitharaman said that the government’s 53.29 percent stake in BPCL will be sold to a strategic buyer, along with transfer of management control. This will exclude BPCL’s stake in the Numaligarh Refinery in Assam. That stake will be retained by the government.
- The government will also divest its 64.45 percent stake, along with management control in Shipping Corporation of India.
- It will sell 30.8 percent stake, along with management control in Container Corporation of India. The government will retain 24 percent stake in Concor.
- Other than that, the government will sell THDC India Ltd. and North Eastern Electric Power Corporation Ltd. to NTPC Ltd.
Telecom Relief
In view of the financial stress faced by major telecom service providers and based on recommendations given by a Committee of Secretaries, the Cabinet has approved:
- To defer receipt of the spectrum auction instalments due from telecom operators for the years 2020-2021 and 2021-22.
- These deferred amounts will be equally spread over the remaining instalments to be paid by the telecom operators without any increase in the existing time period specified for making the instalment payments.
- The interest as stipulated while auctioning the concerned spectrum will, however, be charged so that net present value of the payable amount is protected.
- A telecom operator, opting for the two-year deferment, will provide the government with a financial bank guarantee of the revised annual instalment payable for 2022-23.
Watch Nirmala Sitharaman announce the Cabinet decisions here.
Unified Regulator In GIFT City
The Cabinet has approved a unified authority to regulate all financial services at the IFSC, GIFT City In Gujarat.
Eight regulatory organisations including RBI, SEBI and PFRDA will all be brought together regulate financial services. All eight will have a unified window under one chairman. They shall, in one place, govern all activities in IFSC.
Monetisation Of National Highways
The Cabinet has approved that the National Highway Authority of India may monetise public-funded national highway projects which are operational and have been collecting toll for one year.
Earlier, only those highways which have been collecting toll for two years can be monetised.
NHAI also gets authorised to vary the concession period between 15-30 years depending on the project's features. Earlier, this was for 30 years.
The highway builder has also been authorised to raise long-term finance from banks by securitising the user fee receipts from toll plazas as an alternate mode of asset monetisation.
Arbitration In Construction Sector
Finance Minister Sitharaman said that in cases where government entity has challenged the arbitral award, and as a result, the amount of an arbitral award has not been paid, 75 percent of the award will be paid by the government entity against a bank guarantee.
Four Other Strategic Divestment Approved
Apart from BPCL, the Cabinet also approved strategic divestment of other state-run firms. These are:
- Shipping Corporation of India: 64.45 percent stake along with management control.
- Container Corporation of India: 30.8 percent stake along with management control.
- Government stake in THDC India Ltd. will be given to NTPC Ltd.
- North Eastern Electric Power Corporation Ltd. too will be sold fully to NTPC.
Cabinet Approves BPCL Divestment Minus One Refinery
The Cabinet has approved a strategic divestment of the government’s 53.29 percent stake Bharat Petroleum Corporation Ltd. divestment to a strategic buyer, along with transfer of management control. This will exclude BPCL’s 61 percent stake in Numaligarh Refinery in Assam. That stake will be moved out of BPCL before the disinvestment and retained by the government.
