Budget 2019: Government Raises Divestment Target To Rs 1,05,000 Crore In FY20
Indian two thousand rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Budget 2019: Government Raises Divestment Target To Rs 1,05,000 Crore In FY20

India targets mopping up Rs 1,05,000 crore from selling shares in Central Public Sector Enterprises in financial year 2019-20, higher than the Rs 90,000-crore target set during the interim budget earlier this year.

If met, this will be the highest-ever mop-up through divestment.

The government proposed that it will consider reducing its share in some companies where it still wants to hold a controlling stake, below 51 percent on a case-to-case basis. It will again initiate the strategic divestment of Air India and other CPSEs.

Money raised from divestment of the government’s stake in public enterprises is one of the key sources of revenue apart from taxes and will play a key role to help fund the various programmes announced.

In 2018-19, the government had set a divestment target of Rs 80,000 crore. However, it exceeded that for the second straight year, raking in Rs 85,000 crore by March-end. This was largely led by a stake sale in power sector financier REC Ltd. to state-run peer Power Finance Corporation Ltd. and offloading shares in public sector entities through exchange-traded funds.

This year, so far, the Finance Ministry has announced that it will divest 25 percent in RailTel Corporation—where it currently owns 100 percent stake.

The government had mopped up a record over Rs 1 lakh crore in 2017-18 fiscal. This was higher than Rs 47,743 crore raised in 2016-17, Rs 42,132 crore in 2015-16 and Rs 32,620 crore in 2014-15.

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