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DoD moots skimming oil PSUs' cash reserves

The divestment department has mooted a proposal to skim off cash balances of three oil PSUs, including IOC, as part of a strategy to exceed the budgetary target of Rs 120 billion set for 2002-03.

The department is reported to have written to Finance Minister Jaswant Singh suggesting drawing down of cash reserves of Indian Oil Corporation, Oil and Natural Gas Corporation and Gas Authority of India, where the government has decided to retain at least 51 per cent stake while privatising other oil PSUs.

Earlier, DoD had suggested that the government could mop up about Rs 250 billion by way of public offering of equity in five major PSUs -- National Thermal Power Corporation, IOC, ONGC, Gas Authority of India and Bharat Sanchar Nigam.

The suggestion for skimming off the cash from reserves of the identified PSUs is on the lines of Videsh Sanchar Nigam where the government withdrew sizable cash (almost Rs 30 billion) by way of special dividends prior to the privatisation of the overseas communication giant.

VSNL had declared two dividends of 750 per cent and 125 per cent during the last fiscal to its shareholders.

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