Budget 2019: Contrary to the expectation of shortfall in disinvestment proceeds, Finance Minister Piyush Goyal exuded confidence that the government will cross the budgeted target of Rs 80,000 crore this year. Presenting his maiden and Modi government’s final Budget, Goyal also raised the disinvestment target for the financial year 2019-20 by 12.5% on-year to Rs 90,000 crore.
“The government received over Rs 1 lakh crore from disinvestment proceeds during 2017-18. We are confident of crossing the target of Rs 80,000 crore this year,” Goyal said in his closely-watched Interim Budget speech.
The government has received Rs 35,533 crore so far, latest figures from Department of Investment and Public Asset Management show. With just two months left, the government needs to carry out disinvestment worth Rs 44,467 crore.
Moreover, the government’s fiscal math of accommodating populist measures is largely dependent on meeting the disinvestment target, which seems ambitious, said experts. “The disinvestment target is still being maintained while it looks increasingly difficult to achieve,” Ranen Banerjee, Partner & Leader, Public Finance and Economics.
The government is expected to fall short of disinvestment target by Rs 20,000 crore, a recent report by Care Ratings said. Data show that in the last five years, the government has failed to meet disinvestment targets every year, with FY18 being an exception. “In an average, the government has achieved nearly 65% of the budgeted disinvestment during FY14 – FY17,” the report said.
The government has planned another tranche of ETF in the form of FFO of Bharat 22 ETF and expects to raise around Rs 14,000 crore by selling 52.63% stake in Rural Electrification Corporation (REC) and another Rs 12,000 crore via buyback of PSUs shares. However, market volatility ahead of Lok Sabha elections may make it difficult for disinvestment prospects.