Opinion | How to set the sell-off ball rolling once again2 min read 17 Sep 2019, 10:00 PM IST
This year’s disinvestment target may prove elusive if New Delhi waits for a stock market upturn to offload its equity. Sell-offs must simply be investor-friendly for them to succeed
The government is reportedly drawing up plans to sell its stake in several state-run companies as part of its disinvestment programme for this financial year. A clutch of companies has been identified for the sale of minority stakes, and a list of companies for strategic disinvestment—where the government hopes to reduce its ownership to a minority holding—has also been sent to the Prime Minister’s Office for approval. Now that half this financial year is almost over, the urgency to fast-track these sales couldn’t have been any higher. Of the ₹1.05 trillion disinvestment target set for 2019-20, only ₹12,357 crore, or 12%, has been raised so far. Of course, the government could always engineer a last-minute rescue, by having one state-run company buy the stake of another—like the ONGC-HPCL deal last year—or by having Life Insurance Corporation subscribe to share offerings, but such a strategy could erode the agenda’s credibility. It’s best if disinvestment is done to achieve efficiency aims. Firms that would perform better in private hands than public should be allowed to change owners.