New Delhi: The Cabinet today approved the divestment of a 10 per cent stake in Engineers India, which is 90.40 per cent owned by the government.
Engineers India provides engineering and related technical services for petroleum refineries and other industrial projects.
The government plans to raise Rs 800 crore from the divestment, Finance Minister P Chidambaram told reporters on Thursday after the meeting of the Cabinet Committee on Economic Affairs (CCEA).
While it aims to raise Rs 30,000 crore from share sales in state-run companies in the fiscal year that ends in March, thus far, it has managed to garner just under 25 per cent of that target.
Mr Chidambaram also said that a hike in fuel prices was not discussed by the Cabinet. "No proposal has come from Petroleum Ministry on fuel prices. As and when the proposal comes, appropriate cabinet committee will discuss and decide on the issue," he said.
Sources had said earlier that the Oil Ministry has proposed a Rs. 3-4.50 per litre hike in diesel price and Rs. 100 in LPG rates along with raising the number of subsidised cooking gas cylinders for households to nine a year from the current cap of six. (Read more)
The Cabinet, however, deferred a decision on a Rs 200 crore revival package for sick public sector unit Scooters India (SIL).
After the government shelved a plan to sell its entire stake in SIL, the Department of Heavy Industry had proposed a revival package of more than Rs. 200 crore for the company, PTI reported earlier, citing sources.
The department had consulted the Board for Reconstruction of Public Sector Enterprises (BRPSE), which examined the case and later suggested a revival package.
While cash assistance implies equity infusion, grants and loans, non-cash assistance includes waiving interest, government loan and conversion of loan into equity.
In 2011, the Union Cabinet had given approval to divesting government's entire 95.38 per cent stake in SIL to a private player through strategic route (outright sale). But the Department of Heavy Industry put on hold the strategic sale.
The automobile company, which has about 1,200 regular employees, has been incurring losses since 2002-03. In March 2009, the company was declared sick.
Incorporated in 1972, SIL initially manufactured scooters under the brand name Vijai Super for the domestic market and Lambretta for the overseas markets.
Later, it ventured into the three-wheeler segment with the Vikram brand. In 1997, it stopped two-wheeler production and is now engaged in the manufacture and marketing of only three-wheelers. SIL's net loss (before tax) stood at about Rs. 20 crore during the 2011-12 fiscal year.
With inputs from Reuters and PTI