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Govt plans to modify disinvestment scheme by reviving SUUTI

India Infoline News Service | Mumbai |

At present SUUTI's stakes in various listed companies comprise to around Rs. 50,000 crore hence SUUTI revival plan is essential for finance ministry’s divestment programme

The ministry on finance has selected six companies for the government's disinvestment programme, according to a media report.

The finance ministry is also planning to modify the disinvestment scheme by reviving the defunct Specified Undertaking of Unit Trust of India (SUUTI) and launching public-sector exchange-traded funds (ETFs), the report said.

The department of disinvestment expects that ETF will encourage long-term foreign investors to participate in the divestment programme as that would also guard the country against sudden outflows and also finance its current account deficit, the report further said.

According to draft Cabinet note on November 18, the finance ministry has suggested that the Cabinet should review its 23 March 2012 decision to shut down SUUTI.
After SUUTI was closed, a new company called NFHCL was established. However, NFHCL is not as effective as SUUTI. At present SUUTI's stakes in various listed companies comprise to around Rs. 50,000 crore hence SUUTI revival plan is essential for finance ministry’s divestment programme, the report added.

Finance minister P Chidambaram as part of his Budget proposal had targeted to raise Rs. 40,000 crore through divestment in FY13-14. However is government expects to raise about Rs. 24,000 crore if some major public sector companies enter the market.
 

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