Despite frantic efforts, the government failed to garner R40,000 crore from divestment of PSUs in 2011-12. The modest figure indicates that the government is not sure whether the markets will rebound in the near term.
Also, there is a realisation that repeated failures to meet targets could be embarrassing for the policy makers even as it disrupts fiscal calculations.
Hard-pressed for funds, the government recently approved the proposal for expediting disinvestment through the buyback route under which blue-chip state-owned companies can buy their own stakes. The proposal is expected to help the government in the coming fiscal. The government till date has been able to raise R13,912 crore by offloading 5% in Oil and Natural Gas Corporation of India and follow-on public offer of Power Finance Corporation (PFC).
In 2010-11, the government earned R22,762.96 crore from stake sales in SJVN, Engineers India, Coal India, Power Grid, MOIL and Shipping Corporation of India. It decided to go slow on divestment due to poor market conditions and a windfall earning of over R1,00,000 crore from the auction of 3G spectrum that was more than sufficient to bridge the fiscal deficit.
In the current fiscal, the government postponed plans for stake sales in public sector firms like MMTC, SAIL, RINL, BHEL and Hindustan Copper. All these offers will be considered in the next fiscal.