Cabinet to consider 10 per cent stake sale in Indian Oil, say sources

The Cabinet Committee on Economic Affairs will discuss on Wednesday the possible sale of a 10 per cent stake in Indian Oil Corp, two sources with knowledge of the matter said, as the government finds ways to meet its fiscal deficit target.

The sale of a stake in state-run Indian oil, the country's largest oil refiner, could help the government raise more than US $1 billion towards its asset sale target of US $10 billion for the current financial year ending March 31, 2014.

"In all probability it will be approved," said one of the government officials, neither of whom wished to be identified.

Prime Minister Narendra Modi's government is struggling to deliver on its budget promise to trim the fiscal deficit to a seven-year low by the end of the 2014-15 fiscal.

It has managed to raise just over US $300 million of the divestment target so far and stake sales in Coal India (CIL) and Oil and Natural Gas Corp (ONGC) are planned.

Several officials have said, however, that the government is unlikely to meet its ambitious fiscal deficit target.

(Reuters)