JOIN USDivestment target lofty, say experts
A day after Finance Minister Arun Jaitley’s Budget proposed a record disinvestment target of Rs 72,500 crore for fiscal 2018, experts apprehended it too lofty, as the Centre has failed to meet its share sale target for last five years in a row.
“The only negative in the Budget was a very high target for disinvestment, specially when you have not been able to achieve targets in the past year,” according to Ridham Desai of Morgan Stanley.
Desai, however, said that he tried hard to find some negative points in this year’s Budget but he could step on none except divestment.
The government has achieved less than half of the 2016-17 divestment target of Rs 56,500 crore in the past 10 months of the the current fiscal. However, it proposed an investment of Rs 72,500 for the next year.
Of the total proposed sum for the next year, the Centre aims to garner Rs 46,500 crore from minority stake sales through new listings as well as already listed firms. A total of Rs 15,000 crore is expected to come from strategic sales and Rs 11,000 crore through listing of state-owned insurance companies.
The government has failed to realise the targeted disinvestment sum eversince 2011-12. It had targeted Rs 40,000 crore that year but got only Rs 13,894 crore. In 2012-13, the government netted Rs 23,957 crore against a target of Rs 30,000 crore. In 2013-14, the target was set at Rs 40,000 crore again, but the net achievement was Rs 15,000 crore.
In 2014-15, the divestment target was of Rs 43,000 core but the net receipt was half. Last year, against Rs 41,000 crore, the government achieved Rs 32,149 crore. This year the target is Rs 56,500. So far, it has achieved Rs 23,529 crore.
Reduction of stake
“Besides strategic and minority stake sale, Rs 11,000 crore has been budgeted from listing of general insurance companies. The department will make best endeavour to meet the overall Budget target,” Disinvestment Secretary Neeraj Gupta said.
Recently, the Cabinet approved reduction of stake in five state-owned general insurance companies to 75% by listing them on the bourses.