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Home >Budget 2015 >Budget News >Budget 2015: Govt sets a divestment target of Rs69,500 crore
In FY15, the government had set a target of Rs63,425 crore through stake sales, out of which it has so far garnered only Rs31,350 crore, including Rs5,000 crore from sale of special drawing rights to the Reserve Bank of India. Photo: Pradeep Gaur/Mint (Pradeep Gaur/Mint)
In FY15, the government had set a target of Rs63,425 crore through stake sales, out of which it has so far garnered only Rs31,350 crore, including Rs5,000 crore from sale of special drawing rights to the Reserve Bank of India. Photo: Pradeep Gaur/Mint
(Pradeep Gaur/Mint)

Budget 2015: Govt sets a divestment target of Rs69,500 crore

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.

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