Ruling out any plans to restructure the National Investment Fund (NIF), the government on Friday said the proceeds from divestment of the NHPC and Oil India Limited (OIL) will be credited to the NIF.
"The process of initial public offerings in NHPC Limited and Oil India Limited are already in progress. The receipts from the divestment would be channelised into NIF," Minister of State for Finance S S Palanimanickam said in a written reply in the Lok Sabha.
The IPOs of the NHPC and OIL were expected to hit the capital market in August and September, respectively, while the divestment of other PSUs would be decided on a case by case basis.
Asked whether the government was proposing to amend the NIF guidelines, the Minister in a separate reply said, "no".
Under the existing guidelines, the divestment proceeds are deposited in the NIF, which is managed by three public sector mutual funds -- UTI Asset Management Company, SBI Funds Management and LIC Mutual Fund Asset Management Company.
The NIF currently has a corpus of Rs 1,815 crore (Rs 18.15 billion). It generated an income of Rs 85 crore (Rs 850 million) in the first year, Palanimanickam said.
According to the guidelines, 75 per cent of the income from the NIF is used for funding social sector schemes to promote education, health and employment, while the residual amount is invested in the PSUs, especially those which can be revived.
Answering a question on the government's proposal to expedite divestment of PSUs, Palanimanickam said, "The policy of the government is to develop people-ownership of public sector undertakings while ensuring that government equity does not fall below 51 per cent and the government retains management control of the company."
"The cases of divestment would be decided on a case by case basis," he added.
The Economic Survey, which was tabled in Parliament ahead of the Budget, had suggested that government should look at raising Rs 25,000 crore (Rs 250 billion) every year from the sale of its equity in the public sector undertakings.
