By TIOL News Service

NEW DELHI, AUG 18, 2014: THE Government has proposed to disinvest 10% GoI’s equity in Coal India Ltd (CIL) out of its holding of 89.65%. As per the Statement of the Power Minister in the Lok Sabha recently, the Government has constituted the National Investment Fund on 3rd November, 2005, into which the proceeds from disinvestment of CPSEs were to be channelized. The Government last year approved restructuring of the NIF and decided that the disinvestment proceeds with effect from the fiscal year 2013-14 will be credited to the existing ‘Public Account’ under the head NIF and they would remain there until withdrawn/invested for the approved purposes. It was decided that the NIF would be utilized for the following purposes:-

(i) Subscribing to the shares being issued by the CPSEs including Public Sector Banks (PSBs) and Public Sector Insurance Companies, on rights basis so as to ensure 51% ownership of the Government in those CPSEs/PSBs/Insurance Companies, is not diluted.

(ii) Preferential allotment of shares of the CPSE to promoters as per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 so that Government shareholding does not go down below 51% in all cases where the CPSE is going to raise fresh equity to meet its capital expenditure programme.

(iii) Recapitalization of public sector banks and public sector insurance companies.

(iv) Investment by Government in RRBs/IIFCL/NABARD/Exim Bank.

(v) Equity infusion in various Metro projects.

(vi) Investment in Bhartiya Nabhikiya Vidyut Nigam Ltd and Uranium Corporation of India Ltd.

(vii) Investment in India Railways towards capital expenditure.

Reforms in Coal Sector

As per the Minister, the Government has decided to allocate area containing coal for specified end uses through auction by competitive bidding. For augmentation of coal production in the country through Public Private Participation, a Model Concession Agreement (MCA) for engagement of Mine Developer cum Operators in Coal India Limited (CIL) and its subsidiary companies was finalized in consultation with Planning Commission and other concerned Ministries and the same has been sent to CIL for its adoption by their Board.

Coal Mines (Nationalization) Amendment Bill, 2000 was introduced in Rajya Sabha on 24.04.2000 to amend the Coal Mines Nationalization Act, 1973 to allow Indian companies in the private sector to mine coal in the country without the existing restriction of captive mining. All stakeholders will be consulted before the Bill is taken up, the Minister added.