Last minute dash likely as disinvestment proceeds far short of Rs 80000 cr target

Last minute dash likely as disinvestment proceeds far short of Rs 80000 cr target

New Delhi, Nov 26: The last four months of the financial year 2018-19 will be crucial for the government to balance its books, with the Centre so far achieving less than a fifth of its budgeted Rs 80,000 crore disinvestment revenues for this year.
As on November 8, the government garnered Rs 15,247 crore as disinvestment proceeds, government data showed. This includes Rs 5,218 crore from Coal India share sale, Rs 1,700 crore from initial public offering (IPO) of Mishra Dhatu Nigam, RITES, IRCON International and Garden Reach Shipbuilders and Engineers.
The government was also able to raise Rs 8,325 crore from Bharat 22 ETF (Exchange-Traded Fund), which is similar to mutual funds.
Proceeds from the finance ministry’s department of investment and public asset management (DIPAM) comprises a significant, part of non-tax revenue for the Centre. A higher receipt from disinvestment is crucial as there is uncertainty regarding in meeting the indirect tax collection target, mainly from Goods and Services Tax (GST).
Robust revenue collection along with healthy disinvestment proceeds are crucial to enable the government to achieve its fiscal deficit target of 3.3 percent of gross domestic product (GDP) for the financial year 2018-19.
Last year, the government exceeded the disinvestment target of Rs 1 lakh crore in 2017-18, mainly on the back of multiple deals like an agreement with ONGC for the strategic sale of its 51.11 percent equity share-holding in HPCL at a consideration of Rs 36,915 crore.
The budgeted estimate for last year was Rs 72,500 crore, comprising sale of equity in state-owned companies, including strategic sale and was later revised and increased to Rs 1 lakh crore. The target included Rs 46,500 crore as disinvestment of central public sector enterprises, Rs 15,000 crore from strategic disinvestment and Rs 11,000 crore from listing of insurance companies.
However, according to Union Budget 2018 medium term fiscal policy statement, the disinvestment target is anticipated to be decline over the medium-term as the number of eligible disinvested companies reduces.
“Hence, the disinvestment receipts have been budgeted at Rs 80,000 crore in budgeted estimates of 2018-19 and projected at Rs 60,000 crore each in 2019-20 and 2020-21,” statement said.