The new Government could look at the possibility of a strategic sale of state-owned enterprises in the non-core sectors such as steel and cement, the Disinvestment Department said in its presentation to the Cabinet Secretary.

The move to divest the entire stake in the non-strategic PSUs, the official said, will also help in meeting the ambitious disinvestment target of ₹51,925 crore this fiscal.

Alternatively, the official suggested, the Government could follow the existing practice of piecemeal stake sale in state-owned companies.

The strategic sale, however, could be a better option as it would help the Government in realising the true value of the investments made in setting up of the PSU.

These views formed part of the suggestions made by the Disinvestment Department to Cabinet Secretary Ajit Seth, who is collecting inputs from various ministries for the new Government which will assume office on May 26.

The official said non-strategic PSUs from which the Government could easily exit are in the cement, steel, textiles, fertiliser, petrochemical and transport equipment sectors.

The Government, the official added, could retain its stake in PSUs in sectors such as petroleum, heavy engineering and power.

In the interim budget presented in February, the UPA Government had proposed to mobilise ₹15,000 crore from the stake sale in HZL and Balco. Further, it hoped to garner ₹36,925 crore from disinvestment in other PSUs in 2014-15.

The Government expects to sell its remaining stake in Hindustan Zinc (HZL) and Balco in 2014-15.

It sold majority stakes in the two companies to the Vedanta Group during 2001-03 and now holds 29.54 per cent in HZL and 49 per cent in Bharat Aluminium Company (Balco).

The Government also holds some stake in Larsen & Toubro, Axis Bank and ITC through SUUTI.

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