The government, which is facing economic crisis due to Corona epidemic, can set its biggest disinvestment target in the upcoming budget so far. The target of disinvestment for the coming financial year can be up to three lakh crore rupees. The government had set a disinvestment target of Rs 2.1 lakh crore for the current financial year 2020-21, but so far only six per cent of the target has been achieved.
According to sources in the Finance Ministry, disinvestment can be an effective way to reduce the large gap in government spending and receipts in the next financial year. Due to Corona, the government did not show any hurry in disinvestment of many companies in the current financial year because it was expected to not get good price. The global economy is expected to pick up in the next financial year and the disinvestment program scheduled for the current financial year will also be executed in this period itself. In July last, Finance Minister Nirmala Sitharaman announced the sale of government stake out of 23 Central Public Companies (PSUs) and this work is also expected to be completed in the coming financial year. The sale of government stake in all of these has also been approved by the Union Cabinet.
According to the ministry sources, the government will also be obliged to keep the target of disinvestment up to three lakh crores in the coming financial year, so that the fiscal deficit can be kept under control. According to the SBI ECoRAP estimates, in FY 2021-22, the government’s expenditure could be up to 35.7 lakh crores while the government’s receipts could be up to 24.1 lakh crores. This difference is 11.17 lakh crore which can be up to 5.2 percent of the gross domestic product (GDP). This gap can be reduced if successful disinvestment targets are achieved. However, even in FY 2019-20, the government could not achieve the disinvestment target. The target of disinvestment of Rs 1.05 lakh crore was set in the budget announcement for the last financial year, which was reduced to 65,000 crore.
According to the Department of Investment and Public Asset Management (Deepam) of the Finance Ministry, disinvestment of Rs 12,450.24 crore has been carried forward so far in the current financial year. According to Deepam, the strategic sales process of companies like Air India, BEML, Rashtriya Chemicals and Fertilizers, Shipping Corporation has started.
Disinvestment so far this year
BDL (OFS): 771.46 Crore
HAL (OFS): 4924.23 Crore
MDL (IPO): 442.79 Crore
IRCTC (OFS): 4473.16 Crore
IRCTC Supply Offs: 0.76 Crore
Other: 1837.84 Crore
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