PSU divestment
now govt has changed the course ...... the proceeds will be used to fund social benefits of capital nature instead of putting them in NIF ...... what it actually means some revenue deficit will be made good by these sale proceeds ....
effect ... it reduces pressure on govt to make some excise changes which wud hv otherwise become necesary ....... that is why u wl see auto stocks running particularly ..... but these changes will happen ... to a lesser extent in feb budget ... - nov schedule of changes will be scrapped ........ the auto stocks still continue to be overvalued .....
PSU DIVESTMENT - to fund revenue deficit ......
is it like selling family silver to fund daytoday expenses ..... yes and no .... if it is done to support draught relief or drinking water projects etc .... where the benefit is trickling to the poorest of poor ..... the cause is justified ...
if it is only used to cover revenue deficit which will happen due to reduced excise ...... then it is not at all justified as the corporates dont need that kind of support now - as can be seen the results of last two quarters ...... govt has passed an enabling resolution .... now it remains to be seen how the proceeds are actually utilised ........
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