India May Miss Revised Divestment Target For 2019-20 As Coronavirus Threat Looms
So far, the Indian government has garnered Rs 34,845 crore through stake sales.
India is likely to miss its revised divestment target for the ongoing financial year amid a selloff in the equity market triggered by the novel coronavirus outbreak, according to a senior government official.
The government won’t be able to move forward with its planned stake sales for now, the official told BloombergQuint on the condition of anonymity, adding they won’t help in garnering the divestment receipts as estimated at the time of making budget calculations.
India revised its divestment target for 2019-20 to Rs 65,000 crore from Rs 1.05 lakh crore after it could not complete the ambitious privatisation of some state-run firms. It has so far garnered Rs 34,845 crore through stake sales, including the Rs 30,868-crore through further fund offers of exchange-traded funds, the government data showed.
But the current market conditions, according to the official, will make it difficult for the government to collect another Rs 30,000 crore before the financial year ends.
India’s equity benchmarks have tumbled more than 20 percent from their January peaks, joining the global peers by slipping into the bear territory, as the spreading Covid-19—that the World Health Organization declared a pandemic—threatens to stall economic growth.
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According to the official, the government’s priority now is to complete the sale of its stake to other state-run firms. The sale of government’s holding in Kamarajar Port Ltd. to Chennai Port Trust will be completed in the next few days and will help the government collect around Rs 2,000 crore, the official said.
Also, the sale of government’s stake in THDC India and North Eastern Electric Power Corporation to state-run NTPC Ltd. is expected to be completed soon, the official said.