India plans to raise 350 billion rupees (US$6.5 billion) in the next fiscal year by selling shares in state-owned companies as the nation strives to pare its budget deficit, two officials with knowledge of the proposal said.
The government aims to sell stakes in companies including Coal India Ltd, Indian Oil Corp, Engineers India Ltd, Power Grid Corp of India Ltd and Bharat Heavy Electricals Ltd, the Ministry of Finance officials said, asking not to be identified as the plan is not public.
The offering for Kolkata-based Coal India, the world’s largest producer, will be the biggest and will seek to raise 200 billion rupees, both officials said.
Indian Minister of Finance Palaniappan Chidambaram, who unveils the budget on Feb. 28, has pledged to bolster the state’s revenues and curb spending to narrow the widest budget deficit in major emerging nations.
The government has raised about 72 percent of its 300 billion rupee target for share sales in the fiscal year through March.
Chidambaram has vowed to contain the excess of expenditure over receipts at 5.3 percent of GDP in the 12 months that began April 1, and at 4.8 percent next financial year. The government partially freed diesel prices from state control last month to limit fuel subsidies.
Officials are trying to avert a credit-rating downgrade, after Standard & Poor’s and Fitch Ratings said last year that they may demote India to junk status because of the fiscal gap and the current-account deficit.