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Business News/ Politics / Policy/  Govt set to hit divestment goal for first time post ONGC-HPCL deal

New Delhi: The government is all set to cross annual disinvestment target this fiscal for the first time with Oil and Natural Gas Corp. Ltd (ONGC) buying the centre’s entire 51% stake in Hindustan Petroleum Corp. Ltd (HPCL) for Rs36,915 crore.

Total disinvestment proceeds during the current financial year 2017-18 stood at Rs54,337.60 crore (as on 11 January). With its stake sale in HPCL, the government’s disinvestment receipt will work out to be Rs91,252.6 crore. The higher receipt from disinvestment will help the government in sticking to its fiscal deficit target of 3.2% of the GDP this financial year, which may see lower collections from the newly introduced goods and services tax (GST).

In the Union Budget presented on 1 February last year, finance minister Arun Jaitley had set the target of disinvestment in public sector units at Rs72,500 crore. This include Rs46,500 crore as disinvestment of CPSEs, Rs15,000 crore from strategic disinvestment and Rs11,000 crore from listing of insurance companies.

The government reduced its stake in several PSUs this year, including HUDCO, EIL, NTPC, Nalco and Oil India Ltd. Two state-owned insurance companies, GIC and New India Assurance were listed on stock exchanges this fiscal.

In the last fiscal, the government had raised a record Rs46,247 crore. In the budget for 2016-17, it had set a target of Rs56,500 crore from disinvestment. Later in the Revised Estimates, the target was scaled down to Rs45,000 crore.

State-owned ONGC on Saturday announced acquisition of the government’s entire 51.11% stake in oil refiner HPCL for Rs36,915 crore, paying a premium of over 10%. Earlier in the month, the government had announced to curtail its additional market borrowing programme by 60% to Rs20,000 crore.

The decision to lower additional borrowing, which was taken after a review of revenue receipts and expenditure, will help contain fiscal deficit that has come under stress on account of lower GST mop up. In the budget, the government had announced the fiscal deficit target for fiscal ending March 2018 at 3.2% of the GDP.

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Updated: 20 Jan 2018, 07:50 PM IST
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