The central government is considering selling its stake in Coal India and IDBI Bank to raise funds of Rs. 20,000 crore. The central government can bring economic incentives to revive the country’s economy. Under this scheme, the central government will insist on its stake sale which rests on market sentiment.
In case of Coal India, if the valuations are not attracted, then the company will buyback shares from the government. Covid-19 epidemic has impacted on Prime Minister Modi’s budget goals. With the continuous increase in the number of patients infected with coronavirus, the government is under the burden of running welfare schemes. There is a great need for an incentive package for this. In February this year, Prime Minister Modi referred to the 2.1 lakh crore package to control the fiscal deficit of 3.5% of GDP. But the growing outbreak of coronavirus is having a profound impact on the country’s economy. India has overtaken Russia to the third position in the world.
The ban on international flights and the reduction in oil prices have put the cloth on sale of Air India and refinery company Bharat Petroleum. India’s property sales target has doubled by the end of the financial year, that is, as of March 31, compared to the previous year.
Last year, the Life Insurance Corporation of India withdrew the 51 percent controlling stake from IDBI Bank, after which the government’s share in the bank remained at 47 percent. The Central Government holds 66 per cent stake in Coal India Limited. In January 2015, the government sold 10 per cent.