The government is actively working on reducing its holdings in select central public sector enterprises to below 51 percent as proposed by finance minister Nirmala Sitharaman in the Budget 2019, government sources told CNBC-TV18.

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The government plan to bring down its holdings below 51 percent will apply to PSUs on a case to case basis as the government is looking to redefine the "government owned" tag for the CPSEs. In the Budget, the government's policy of retaining holdings in PSUs was modified to owning a 51 percent stake "including the stake of government-controlled institutes".

The plan to reduce the stake to below 51 percent in CPSEs will also create headroom for more ETF offerings.

The finance ministry will need the Cabinet's approval every time it decides to bring its shareholding below 51 percent in any of the CPSEs. In order to make its task easier, the finance ministry may look at a consolidated approach — consolidated nod from the Cabinet by clubbing five or ten CPSEs together in which it intends to bring the shareholding below 51 percent, CNBC-TV18 reported earlier.

The government on July 5 hiked its disinvestment target in the current fiscal from Rs 90,000 crore to Rs 1.05 lakh crore. The hike in the sell-off target comes amid the slow growth in tax proceeds, forcing the government to raise revenue from non-tax revenue sources.

The 2017-18 disinvestment proceeds were above Rs 1 lakh crore. In 2018-19, the sell-off mop up fell to Rs 85,000 crore.

First Published:Sept 10, 2019 1:18 PM IST