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India to offload Bharat Petroleum in state stake sell-off

NEW DELHI (Reuters) - India has agreed to sell stakes in five state-run companies, including oil refiner Bharat Petroleum Corp (BPCL), finance minister Nirmala Sitharaman said on Wednesday, a move that could help bridge a widening fiscal gap.

Smoke billows from the Bharat Petroleum Chemical Limited (BPCL) refinery after a fire broke out in its premises in Mumbai, India, August 8, 2018. REUTERS/Francis Mascarenhas/File Photo

Prime Minister Narendra Modi’s government has also approved the sale of holdings in logistics firm Container Corp of India Ltd and Shipping Corp of India, Sitharaman told reporters after a cabinet meeting.

India has set a target of raising 1.05 trillion rupees ($14.6 billion) through the sale of state stakes in companies by March 2020. It has reached 173.64 billion rupees since April by selling minority stakes in government companies.

The government owns 63.75% of Shipping Corp and a stake of 53.29% in India’s second biggest state refiner BPCL, which industry sources estimate could fetch $8 billion to $10 billion.

Sitharaman said management control of BPCL’s subsidiary, Numaligarh Refinery Ltd (NRL), in the eastern Indian state of Assam, will be given to another oil company for consolidation.

India, which has already announced a plan to sell national carrier Air India, faces tax shortfalls of around 2 trillion rupees in the current fiscal year, making the stake sales critical to relieving the deficit.

Modi’s government has set a fiscal deficit target of 3.3% of gross domestic product (GDP) for the current year, but economists and government sources say this is likely to slip to around 3.8%.

New Delhi also plans to offload stakes in Tehri Hydro Development Corporation India Ltd (THDCIL) and North Eastern Electric Power Corp Ltd (NEEPCO), which the government plans to hand over to state-run power producer NTPC.

India plans to invite international energy firms to participate in the privatisation of state-owned oil companies, oil minister Dharmendra Pradhan said last week.

Separately, the cabinet approved the import of 1.2 million tonnes of onions to curb local price rises, as well as a two-year moratorium for telecom companies to pay their spectrum dues.

($1 = 71.7430 Indian rupees)

Additional reporting by Aftab Ahmed and Nidhi Verma; Editing by Jan Harvey and Alexander Smith