Amid strong opposition from CIL workers union to the proposed stake sale in the company, Finance Minister P Chidambaram has said the disinvestment proceeds of about Rs 20,000 crore (Rs 200 billion) from the coal behemoth will be invested in public sector banks.
"I have made it clear and I want to repeat it, if we disinvest 10 per cent in Coal India (CIL) we will get say roughly about 20,000 crore, every rupee of that will be invested in the public sector bank or another public sector concern," Chidambaram told PTI.
An employee union of CIL had earlier said it planned to go on strike if the government goes ahead with the proposal to sell up to 10 per cent stake in the PSU.
"Now I told Coal India people every rupee that we get out of Coal India I am willing to put it in the public sector bank...So we are not converting assets into current expenditure. We are converting one asset into another asset," Chidambaram said.
He further added that the Coal Minister Sriprakash Jaiswal is talking to CIL unions through his ministry on the issue. The government currently holds 90 per cent stake in CIL. "So I think people should understand that value must be monetised and what you gain out of monetisation is being invested in the capital of public sector banks.
"So why should anyone oppose it. In fact, even the ones that take an extreme left-leaning ideology must support it because public sector banks will get more capital," the Finance Minister added.
Earlier, Indian National Mineworkers Federation had threatened to go on strike if the government went ahead with its plans to offload further equity in the Maharatna firm. Four other unions, including the Hind Mazdoor Sabha (HMS) and the Bhartiya Mazdoor Sangh (BMS)--are also opposed to the stake sale.
One of the unions, in a letter to Jaiswal, had said the government last time had assured it will not go beyond 10 per cent disinvestment. CIL got listed on the bourses in 2010 through an initial public offering in which the government raised Rs 15,199 crore (Rs 151.99 billion) by selling 10 per cent stake.
Coal India, which has a cash balance of about Rs 60,000 crore (Rs 600 billion), will be the biggest disinvestment for the government in the 2013-14 fiscal if offloading of equity goes as per plans.
