Indian Union Budget 2021-22: India had set a humongous disinvestment target for the existing fiscal year 2020-21 – its most ambitious so far. However, with almost 3 quarters of the year currently gone, the nation has accomplished only 3 % of the sales target. Prime Minister Narendra Modi’s government had set a target of raising Rs 2.14 lakh crore by means of disinvestment in the existing economic year – 3 occasions larger than the Rs 67,000 crore in the earlier year. However, it has generated a receipt of Rs 6,533.11 crore so far in the existing fiscal year, according to government information. The government has so far disinvested equity stakes in Hindustan Aeronautics Bharat Dynamics Mazagon Dock Shipbuilders RITES and SUUTI, as observed in the facts readily available with the Department of Investment and Public Asset Management (DIPAM).
Earlier, in July, Finance Minister Nirmala Sitharaman had mentioned that the government was working on finishing the stake sale method of about 23 PSUs, whose divestment was authorized by the Union Cabinet. Hindustan Prefab Engineering Projects (India) Scooters India Bharat Pumps and Compressors Cement Corporation of India Hindustan Fluorocarbon Bharat Earth Movers Pawan Hans and Air India and its 5 subsidiaries and 1 JV are some of the PSUs incorporated in the list of 23 PSUs selected for disinvestment.
While announcing the Modi government’s flagship Atmanirbhar Bharat package, FM Sitharaman had also announced the opening up of all sectors for private sector participation. In these strategic sectors, the PSU firms are to be restricted to a maximum of 4 units. The government had mentioned that the move would lead to consolidation of PSUs as effectively as scaling up of their operations.
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The government desires to sell a stake in PSUs at a time when it fetches the correct price tag. While Rs 1.20 lakh crore out of the disinvestment target of Rs 2.14 lakh crore will come from disinvestment of PSUs, a further Rs 90,000 crore is probably to be generated from stake sale in economic institutions. It is to be noted that apart from the above disinvestment, the government has also disinvested $1.1 billion from FDI by India in the initial half of the existing fiscal, according to RBI.
Meanwhile, the government plans to sell about 15-20 % stake in Indian Railway Catering and Tourism Corp (IRCTC) by means of supply for sale (OFS) and would like to total the transaction in a minimum quantity of tranches. Apart from IRCTC, the disinvestment method of BPCL, along with Air India is producing headlines. Tata Group has submitted an expression of interest (EoI) for the debt-laden national airline Air India more than the weekend, which may possibly bring the bidder back in the cockpit soon after its 1953 exit.