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Boon or Bane to Economy

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FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND INDUSTRY

Disinvestment

Boon or Bane to Economy

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DISCLAIMER

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1. PREFACE . . . .6 2. INDUSTRY INSIGHTS . . . .7

Disinvestment: Boon or Bane to Economy

‡ 9

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Can we go back to the basics? 12

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Disinvestment – Boon or Bane to Economy 16

‡

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Disinvestment: Boon or Bane to Economy 21

‡

0U+LPDQVKX.DML([HFXWLYH'LUHFWRU *URXS&KLHI2SHUDWLQJ2IÀFHU(GHOZHLVV)LQDQFLDO6HUYLFHV/WG Disinvestment: Boon or Bane to Economy

‡ 24

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Disinvestment- Boon or Bane 30

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Disinvestment: A boon or a bane 34

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Divestment of Public Sector – Challenges and Prospects 37

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Disinvestment – Boon or Bane to Economy 42

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Disinvestment-Boon or Bane to Economy 46

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Disinvestment – Boon or Bane to Economy 50

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Disinvestment— Boon or Bane to Economy 55

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3. THE POLICY PULSE . . . .59

Banking Sector 60

‡

Capital Markets Sector 63

‡

Insurance Sector 67

‡

4. FICCI’S DATA CENTRE . . . .71

Indian Economy-An Update 72

‡

Investment Banking Updates 78

‡

Markets Watch 86

‡

5. FINANCIAL SECTOR EVENTS . . . .88

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Dr. A. Didar Singh Secretary General

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In association with

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Disinvestment: Boon or Bane to Economy

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Annual divestment trend: Shows the trend of rising

disinvestments with falling revenues

Subsidy and interest payments as a share of total expenditure

Capital expenditure share in the total expenditure has remained constant over the last four years

Government

has mostly used

disinvestment

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rather than growth

objectives.

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Managing Director & Head of Equities - India Religare Capital Markets

Limited

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Can we go back to the basics?

Mr. Bharat Banka

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(QWLUHIRFXVUDWKHU shifts to a pre-

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as a PSU it must be

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only way to get rid of

it is to shut it down or

to disinvest.

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(16)

The Debate

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Indian Approach to Disinvestment

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National Investment Fund

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Challenges to Disinvestment

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India’s government

missed its disinvest-

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initially budgeted

Rs 40,000 crore.

(19)

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(20)

S. S. Mundra

Chairman & Managing Director Bank of Baroda

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(21)

“It is time that the

government adopt a new approach to the public enterprises”

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Disinvestment: Boon or Bane to Economy

Mr. Himanshu Kaji ([HFXWLYH'LUHFWRU *URXS&KLHI2SHUDWLQJ2IÀFHU (GHOZHLVV)LQDQFLDO6HUYLFHV/WG

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in 1980s in order to

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(27)

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Repurposing disinvestment agenda

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Divestment of

majority stake should happen in SOEs which are operating in developed and FDSLWDOHIÀFLHQW sectors whereas partial and gradual stake sale can happen in enterprises

that operate in

ecosystems which are

still evolving.

(28)

Annexure

Total disinvestment proceeds to government of India from 1991 – 2014

Disinvestment Route Rs. Crore

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India among top countries in terms of disinvestment in H12013

Country Numbers of Deals Total value (5 million)

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(29)

Anup Bagch

Co-Chair, FICCI’s Capital Markets Committee &

Managing Director & CEO, ICICI Securities Ltd.

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