How govt can use PSUs to generate Rs 1.75 lakh crore this fiscal
The government can raise funds of around Rs 1.75 lakh crore via PSUs in this fiscal without fiddling with fiscal deficit or selling PSU equity for which there are anyways limited takers, claimed N Jayakumar, MD, Prime Securities in a recent interview with ET Now. “We in Prime Securities are talking about capitalising the reserves and issuing debt as opposed to equity to the stakeholders,” he said, explaining the concept of PSU bonus debentures. When it comes to underleveraged AAA companies, there is enough headroom to reduce reserves while increasing debt without affecting ratings.
“If you add up what we have recommended across 13 companies, we come to around Rs 2.5 lakh crore or $32.5 billion and issuances worth that can happen,” said Jayakumar. As govt holding in PSUs is around 60 per cent, approximately Rs 1.5 lakh crore becomes income that “reduces fiscal deficit” as the debentures can be sold off easily.