The government today approved a proposal to divest 10 per cent stake in aerospace company Hindustan Aeronautics Limited (HAL).
“The Cabinet Committee on Economic Affairs has approved the divestment of 10 per cent equity, of the government’s 100 per cent holding in HAL, through an initial public offering (IPO) in the domestic market, according to Sebi (Securities and Exchange Board of India) rules and regulations,” said an official statement. As on March 31, the company’s paid-up equity stood at Rs 120.50 crore. The proposal to disinvest stake in HAL is aimed at funding the government’s plans to modernise the company, for which Rs 20,000 crore would be required through the next five years. Finance Minister P Chidambaram said the HAL board would have to be restructured before the IPO, adding the IPO would be launched next financial year. Earlier, the government had set up an expert group under former Cabinet secretary B K Chaturvedi to suggest steps to restructure HAL. Currently, it is awaiting the group’s report.
21 textile parks approved
Today, the government also approved the setting up of 21 integrated textile parks, envisaging an investment of Rs 819 crore, over the next five years.
Projects in Afghanistan
The Cabinet also approved the third phase of implementation of small-scale projects worth $100 million (Rs 540 crore) in strife-torn Afghanistan. The small development projects (SDPs) support socio-economic development and facilitate infrastructure in various sectors, including education, health and agriculture. The two previous SDP phases comprised 101 projects, worth about $20 million.
Change in USOF funding
The government has approved a change in the funding arrangement for schemes under the Universal Service Obligation Fund (USOF). The USOF schemes, including the creation of the National Optical Fiber Network (NOFN) for broadband services, would be funded through Plan allocation for better appraisal, monitoring and performance evaluation.
Earlier the Department of Telecommunications had proposed to restore the budgetary allocation towards USOF under non-Plan expenditure to avoid procedural delays and ensure timely allocation of funds.
The USOF was created under the National Telecom Policy, 1999, to provide telecom services to people in rural areas at affordable prices. Through NOFN, the government aims to connect and provide broadband services across 2,50,000 panchayats in the country. “The NOFN, which was approved in October 2011, would be completed by December 2013,” Chidambaram said.