Budget 2015: Govt sets a divestment target of Rs69,500 crore1 min read . Updated: 01 Mar 2015, 08:07 PM IST
Arun Jaitley set an ambitious target, despite the government missing the previous year’s target by more than half
New Delhi: Finance minister Arun Jaitley set an ambitious target to raise ₹ 69,500 crore through divestment in 2015-16 despite the government missing the previous year’s target by more than half. In 2014-15, the government had set a target of ₹ 63,425 crore through stake sales, out of which it has so far garnered only ₹ 31,350 crore, including ₹ 5,000 crore from sale of special drawing rights to the Reserve Bank of India.
In 2015-16, while receipts from divestment have been estimated at ₹ 41,000 crore, additional resource mobilization of ₹ 28,500 crore has been estimated to flow from strategic disinvestments to meet the revenue shortfall following the 14th Finance Commission recommendations. These include sale of government holdings in non-government commercial entities, Specified Undertaking of UTI, Bharat Aluminium Co. Ltd, Hindustan Zinc Ltd, etc. “Over the medium-term framework, an amount of ₹ 55,000 crore and ₹ 50,000 crore has been estimated for the years 2016-17 and 2017-18, respectively," the medium-term fiscal policy statement said.
Jaitley in his budget speech said the budget reflects considerable scaling up of divestment figures. “This will include both disinvestment in loss-making units, and some strategic disinvestment," he added.
Ranen Banerjee, partner (Public Finance) at PwC India, said while Jaitley is optimistic about achieving the target through divestment of loss-making units and strategic sale of equity, the past performance of various governments does not instill confidence about actual realization of the target. The disinvestment department has lined up a host of companies including 5% stake sale in Oil and Natural Gas Corp. Ltd, Dredging Corp. of India Ltd and Bharat Heavy Electricals Ltd. Besides, the government is planning to sell 10% each in Indian Oil Corp. Ltd, National Aluminium Co. Ltd and NMDC Ltd. It is also planning to list Rashtriya Ispat Nigam Ltd and Hindustan Aeronautics Ltd through a 10% stake sale.