The government is likely to retain its focus on disinvestment of public sector units in the Interim Budget with the aim to take forward pending transactions.
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Sources indicate that for now the target from disinvestment proceeds is likely to be kept at over Rs 50,000 crore to indicate the government’s intent to move forward on disinvestment transactions.
For 2023-24, the Centre had set a target of Rs 51,000 crore from disinvestment proceeds, but is likely to face a shortfall. It has so far raised Rs 10,051.73 crore from pure stake sale receipts and Rs 43,843.38 crore from dividends from central public sector undertakings, taking the total receipts from the Department of Investment and Public Asset Management to Rs 53,895.11 crore.
Proposed disinvestment transactions include the strategic sale of Shipping Corporation of India and Concor and the privatisation of IDBI Bank as well the listing of a handful of PSUs. According to officials, this will be taken forward after the General Elections by the new government. However, further disinvestment in Life Insurance Corporation of India is unlikely to be initiated in the next fiscal.
However, the Interim Budget, to be presented on February 1, is likely to indicate the government’s intention to take forward many of these pending transactions and the target will also indicate the same. A final decision on the disinvestment proceeds will be taken in the full Budget that will be presented later in the year.
They also maintain that some of the shortfall in revenue will be met from the higher dividend proceeds in non tax revenue while robust tax collections are also expected to help the Centre meet the fiscal deficit target in absolute terms.
In recent weeks, DIPAM has been looking for an advisor to manage the Bharat Bond Exchange Traded Fund’s Rs 50,000 crore assets under management.
It has also decided to annul the expression of interest for the strategic disinvestment of Salem Steel Plant, Salem – a unit of SAIL due to a lack of interest from shortlisted bidders to proceed with the transactions.
