PM Meet: Stake Sale, Privatisation Of Electricity Distribution Referred To Concerned Ministries
Workers connect electricity cables to a transmission pole in Manpur Kulchaura, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

PM Meet: Stake Sale, Privatisation Of Electricity Distribution Referred To Concerned Ministries

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Privatisation of electricity distribution, divesting stake in public sector undertakings such as Shipping Corporation of India Ltd. and NMDC Ltd., creation of a National Water and Irrigation Authority and other suggestions made at Prime Minister Narendra Modi's interaction with economists and experts have been referred to ministries concerned for action, sources said.

On June 22, Modi had interacted with select economists and experts on 'Economic Policy: The Road Ahead' with a view to brainstorming for ideas that could help create jobs, boost growth rate and more than double the size of Indian economy to $5 trillion by 2024.

Besides economists and sectoral experts, three industry bigwigs —Tata Sons Chairman N Chandrasekaran, ITC Chairman and MD Sanjiv Puri and Vedanta Resources founder Anil Agarwal— gave suggestions which have now been referred to ministries concerned for follow-up actions, sources privy to the development said.

Chandrasekaran's suggestion of identifying solutions to tide over troubles with banks and shadow banking sector and boost lending has been referred to the Department of Financial Services while the power ministry has been asked to look at his suggestion of undertaking structural reforms such as privatising electricity distribution. Niti Aayog and the Department of Heavy Industries are looking into his suggestion for expediting electric vehicles adoption.

Also read: Modi Interacts With Economists, Industry Experts Ahead Of Budget

Sources said the Department of Investment and Public Asset Management will look at Agarwal's suggestion of government divesting its stake in at least five PSUs such as Hindustan Copper, Kolar Gold, Uranium Corp, SCI and NMDC to reduce the country's $400-billion import bill.

His suggestion on giving autonomy to public sector companies and banks by bringing down government holding to 50 percent and making them board-run firms just like Petronet LNG Ltd. has also been referred to the DIPAM.

Petronet is India's largest natural gas importer. It is a board managed private company even though 50 percent of its shares are with state-owned firms.

Ministries of Coal and Mines have been asked to look at his recommendation of opening up mining in 200 blocks immediately and auctioning of big coal, bauxite, copper and iron ore blocks to help reduce imports that drain out the precious foreign exchange.

The ministries would also look at his suggestion of removing production caps on iron ore such as ones that exist in Goa and Karnataka.

Also read: Bond Vigilantes Seen Giving India's Modi a Pass on Deficit

While the Petroleum Ministry will look at his suggestion of extending exploration and production contracts for oil and gas blocks on same terms with no retrospective tax being imposed, the Ministry of Environment and Forest would look into giving green clearances in 60 days.

Such an extension would allow operators to continue investing in the production of oil and gas from fields they have been operating for 15-20 years.

Agarwal had also suggested reducing corporate tax to 20 percent from 30 percent.

Sources said the Agriculture Ministry will look into Puri's suggestion of creating a National Water and Irrigation Authority that could work on mission mode for water conservation.

It will also look into his other suggestions such as providing farmers real-time local information, creating agri-services entrepreneurs, increasing value addition in farming through a focus on fruits and vegetables and creating demand-driven, localised agri value chain around the urban cluster to boost technology adoption and exports.

Also read: Vedanta Has Lost $200 Million Since Sterlite Copper Plant Shutdown, Says Anil Agarwal

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