Less Than A Fifth Of Divestment Target Achieved With Three Months To Go

With just three months to go, India has mopped up less than a fifth of the divestment target for the ongoing financial year even as the government struggles to contain fiscal deficit.And it could miss the estimates by a wide margin as Bloomberg quoted an unnamed official as saying that the sale of Bharat Petroleum Corporation Ltd. and Air India are unlikely to be completed this financial year.The government has raised just Rs 17,364 crore so far by selling its stake in state-run companies, according to data on the website of the Department of Investment and Public Asset Management. That’s 16.6 percent of the targeted Rs 1,05,000 crore.About Rs 1,881 crore of this year’s divestment collection so far has come from sale of enemy shares—assets left behind by people who have moved to Pakistan or China.Prime Minister Narendra Modi’s government is staring at missing the fiscal deficit target amid lower-than-expected growth in tax revenue and a reduced corporate tax rates. One source of revenue is divestment—sale of minority stake or ceding control of state-owned companies through strategic sales, aimed at exiting non-priority sectors..To be sure, the government has missed its selloff target for most years barring the previous three fiscals. In the last two, it exceeded the estimates. But that was largely on the back of selling its holding in a public sector unit to another state-run company..Pending Strategic SalesThe government has so far given ‘in-principle’ approval for strategic disinvestment of 33 central public sector units, including subsidiaries and joint ventures by transfer of management control.These include selling stake to another public sector unit in three cases—on the lines of sale of Hindustan Petroleum Corporation Ltd. to Oil and National Gas Corporation Ltd. and offloading its stake in power sector financier REC Ltd. to state-run peer Power Finance Corporation Ltd..Among the remaining companies lined up for strategic sales are oil refiner Bharat Petroleum Corporation Ltd., Shipping Corporation of India Ltd. and port logistics firm Concor Ltd..The government has also been raising funds by selling small stakes through the exchange-traded fund of central public sector units. Being the largest shareholder in state-run companies, the government also gets cash whenever public sector firms buy back shares to reward investors. But every year it falls way short of the targets in the two categories.

Less Than A Fifth Of Divestment Target Achieved With Three Months To Go

India has achieved less that a fifth of divestment target with just three months to go.

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