NEW DELHI, Jan 20 (Reuters) - India’s federal government approved on Monday a stake-sale in Hindustan Zinc Ltd, three local television channels said citing unnamed sources.
The government holds a 29.5 percent stake in the company that is controlled by London-listed Vedanta Resources Plc .
The stake-sale is part of New Delhi’s search for funds to deliver on its pledge to narrow the fiscal deficit to 4.8 percent of gross domestic product in the fiscal year ending in March 2014 from 4.9 percent a year earlier.
The government aims to raise around $9 billion selling assets this fiscal year. So far, the stake-sale programme has fetched just 3 percent of the target.
Vedanta, founded by Indian billionaire Anil Agarwal, won the support of its shareholders in October to offer up to $3.48 billion to buy the government’s minority stakes in Hindustan Zinc and Bharat Aluminium Company.
To boost its coffers, the government will also sale a 10 percent stake in Indian Oil Corp. Additionally, it is counting on a $2.98 billion dividend payout from state-run Coal India Ltd.
The fiscal gap reached nearly 94 percent of the full-year target between April and November, casting doubts on the government’s ability to deliver on its promise.