JOIN USWith less than two months to go for the Budget 2015-16 to be presented, it is almost certain that the Centre will miss its disinvestment target.
The target this year is Rs 58,425 crore, out of which Rs 43,425 crore is expected to come via share sale in the public sector undertakings (PSUs). The Centre has so far realised only Rs 1,700 crore through share sale.
It is important that the government garner funds from disinvestment to meet the fiscal deficit target of 4.1 per cent, set this year. Especially when the revenue from tax collection has been abysmally low this year.
The mid-year economic analysis has stated that tax revenues could fall short by as much as Rs 1.05 lakh crore. The fiscal deficit in the first eight months (April-November) has already reached 99 per cent of the full year budget target. “It is very difficult to meet the target, there is very little time left,” an official said.
If the government misses the disinvestment target this year, it will be the fifth year in a row that the target will not be met. Last year too, the disinvestment target was Rs 40,000 crore but not even half the money was realised. In 2012-13, the disinvestment target was Rs 30,000 crore and close to Rs 24,000 crore could be garnered. In the past too, the centre has seldom met its disinvestment target ever since the process started after 1991. The government exceeded its disinvestment target only in 1994, 1998, 2003 and 2004.
Resistance from staff unions of companies such as Coal India and investor worries about some company-specific issues have off late delayed the process.
The official said that the government is also thinking of a fresh strategy to tap the market for share sale.