A parliamentary panel has suggested the Niti Aayog to develop a more ‘holistic view’ on strategic disinvestment or closure of state-owned enterprises that may have a chance of progressing with some assistance, PTI reported. In its report tabled in Parliament today, the Standing Committee on Industry said it is of the opinion that “CPSEs
are still relevant and they may be allowed reasonable and financially prudent chances to revive and restructure”.
On the issue of strategic disinvestments or closures, the committee said though the modern theories of government and economics want the government to withdraw from business, while deciding upon disinvestments/closures, it is always prudent to keep in mind that CPSEs are also meant to serve larger social causes.
Earlier today it was reported that in wake of lower tax collections and reduced RBI dividend, the government is eyeing to extend its disinvestment target to Rs 1 lakh crore as against the FY18 budget target of Rs 72,500 crore. The government is actively considering 3 percent IOC disinvestment via OFS route along with fast-tracking the IPOs of IRCTC and IRFC, ET Now reported citing government sources.
The government has already raised more than Rs 52,380 crore through disinvestment till 15 December 2017 in the FY 2017-18. The Department of Investment and Public Asset Management (DIPAM) is likely to start work on achieving the revised target soon. The government is also considering NHPC, REC, SAIL, and NLC as the other likely OFS candidates, the report says.
HAL IPO is also likely to hit the markets by the end of FY18. The government raised Rs 46,247 crore through disinvestment In 2016-17, the highest ever amount earned by the sale of the equity stake in PSUs. The Centre’s fiscal deficit breached the budgeted level to touch 112 percent of the full-year target in just first eight months, reinforcing concerns about a slippage in 2017-18 unless revenue mop-up goes up substantially or the government reins in spending in the last quarter.
The government had set an ambitious target of raising Rs 72,500 crore through disinvestment in the current fiscal. Of this, Rs 46,500 crore was to be raised through minority stake sale in PSUs and Rs 15,000 crore from strategic sales. Another Rs 11,000 crore was to come from the listing of insurance companies.
Total disinvestment proceeds during the current financial year (as on December 4, 2017) stands at Rs 52,389.86 crore. Notably, India has repeatedly fallen short of realising its disinvestment targets in the past, even though the amount of money raised has constantly increased for the last six years. India raised Rs 42,132 crore in the last financial year 2015-16, and Rs 37,737 crore in the previous fiscal 2014-15.
Earlier last year, in Union Budget 2016, the government had set a target to raise Rs 56,500 crore by divesting stake in state-run companies in order to help fund expenses and bridge fiscal deficit. However, Finance Minister Arun Jaitley later revised the target down to Rs 45,500 crore in the Budget 2017.