Budget 2020 | Centre may revise FY20 disinvestment target drastically

With the sale of public sector enterprises almost muted this year, the Centre is expected to revise the disinvestment target for 2019-20 downward drastically by about Rs 40,000 crore from the original target of Rs 1.05 lakh crore.

So far this year, a little above Rs 18,000 crore has come to its kitty through disinvestment proceeds. It is expecting to mop up another about Rs 39,000 to Rs 40,000 crore from the offer-for-sale (OFS) of about 10 top PSUs including Coal India, NTPC, NMDC, Bharat Electronics and National Fertilizers. The government owns upto 82% in these firms.

The set back on the disinvestment front has come mainly because of the tepid response of investors in two big-ticket sale of Air India and BPCL.

“It is difficult to reach the budget target of PSU share sale this year,” an official privy to Budget making told DH.

While the roadshows in Singapore and London late last month to gauge investor interest in Air India received only a couple of interested bidders, BPCL fell out of hand this year due to poor market conditions and internal resistance from the BJP with RSS trade union Bharatiya Mazdoor Sangh apparently contesting the government decision.

The Centre planned to sell 100% of its stake in Air India and over 53% in BPCL. Together these companies could have garnered a major chunk of Rs 1.05 lakh crore. In November last year, Finance Minister Nirmala Sitharaman had expressed confidence that these two big PSU sal off would take place before March 2020.

However, the hope started to fizzle out after Air India could not evince much interest and BPCL faced some practical difficulties like issuance of expression of interest and the due diligence after that.

In the interim budget for 2019-20, the disinvestment target was pegged at Rs 90,000. However, Sitharaman had raised it to Rs 1.05 lakh crore while presenting her first regular budget in July this year, an all-time high.

An announcement to the revision of the disinvestment target would be made in the in Budget to be presented on February 1.

Official sources said that the government may even draw an overall long-term disinvestment programme for five years or so in the upcoming Budget instead of chalking out an yearly target.