Finance minister Arun Jaitley (PTI)
Finance minister Arun Jaitley (PTI)

Disinvestment exceeds target at 85,000 crore: FM

  • Against a goal of 80,000 crore in FY19,  divestments have touched 85,000 crore,  says FM Arun Jaitley
  • The centre was able to garner revenue through IPOs, share buybacks, offer for sale, as well as ETFs

New Delhi: The centre has exceeded its disinvestment target for the fiscal year 2018-19, finance minister Arun Jaitley said on Friday.

“As against a target of 80,000 crore for disinvestment for the current year, the divestment receipts have touched 85,000 crore today," Jaitley said in a tweet.

As of 28 February, the government had garnered 56,473 crore as disinvestment proceeds.

State-owned Power Finance Corp. Ltd also finalized a deal to acquire a 52.63% stake in another state-owned entity, REC Ltd, for 14,500 crore, taking the disinvestment collection close to 71,000 crore.

In addition, the centre on Friday garnered 10,000 crore through the fourth tranche of CPSE exchange traded fund (ETF). ETFs—index funds that are listed and traded on domestic bourses just like stocks—were introduced in 2017-18 as vehicles for disinvestment of shares.

“CPSE ETF FFO 4 (further fund offer) oversubscribed by about eight times so far against the base issue size of 3,500 crore. Government has decided to retain 10,000 crore," department of investment and private asset management (DIPAM) secretary Atanu Chakraborty said in a tweet.

The government was able to garner revenue through share buybacks, initial public offerings, offer for sale, as well as exchange traded funds.

This is the second time in a row that the centre has been able to exceed its disinvestment target.

In the fiscal year 2017-18, the government had exceeded the target of 1 trillion, mainly because of deals such as ONGC Ltd buying the central government’s entire 51% stake in HPCL Ltd for 36,915 crore.

The disinvestment target for the fiscal year 2019-20 is 90,000 crore.

Meeting the disinvestment target for the current fiscal year was crucial because of the uncertainty in revenue collection from direct taxes as well as from the goods and services tax (GST).

Robust mop-up collection from taxes, as well as healthy disinvestment receipts, will enable the government to achieve the revised fiscal deficit target of 3.4% of gross domestic product (GDP).

The budgeted fiscal deficit target was 3.3% of gross domestic product (GDP) at the beginning of 2018-19 and was later revised to 3.4% of gross domestic product, while preparing the interim budget, mainly because of an expectation of higher payout because of the direct income scheme for farmers.

The fiscal deficit at the end of January stood at 7.7 trillion, or 121% of the revised estimate of 6.3 trillion as total expenditure overshot revenue receipts, according to from the comptroller general of accounts.

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