Modi government clears big-ticket projects worth 10,000 crore

NEW DELHI: In a spate of decisions underlining the government’s reform drive, union cabinet has approved 10% stake sale in Coal India, initial public offer of Cochin Shipyards, and approved 3% interest subsidy for exports.
The cabinet also empowered roads ministry to revive 34 stalled projects by appropriate measure where delay is not because of the builder and cleared big-ticket railway projects adding up to over Rs 8,000 crore.

For the first time, cabinet also approved direct payment of a production subsidy to the farmers.

The union cabinet also allowed separation of land and construction cost of road projects to empower the highways ministry to clear more projects without going to cabinet where the cost escalation is because of higher compensation for land.

Disinvestment drive

The timing and pricing of Coal India will be decided by the finance minister through the group on disinvestment. 10% stake sale in Coal India can fetch the government over Rs 20,000 crore at current prices.

The government is likely to miss its disinvestment target of Rs 69,500 crore in the current year because the pipeline includes many metals company that are not in demand because of the global slump. So far it has managed to raise a little over Rs 12,000 crore.

Cochin Shipyard reported a net profit of Rs 233 crore in FY15 on a turnover of Rs 1,850 crore.

The company is both into shipbuilding & ship repair and its yard can build ships upto 1,10,000 DWT and repair ships upto 1,25,000 DWT.

Exports subsidy

The union cabinet brought back interest subvention scheme for exports providing for 3% subsidy to both pre-shipment and post-shipment credit to exports.

This will be available from April 1, 2015.

India’s exports declined for eleventh month running in October, falling 17.5% in the month. For the period April-October exports are down 17.6% in dollar terms.

Interest subvention for exports was discontinued in 2013-14 by the previous UPA government.

Direct sugar subsidy

For the first time the government has decided to give direct subsidy to farmers for sugarcane sold to sugar mill. The government will give production subsidy to farmers at the rate of Rs 4.5/quintal of sugarcane supplied to the sugar mills. The government said the subsidy was compliant with the World Trade Organisation.