With the fear that disinvestment revenue this fiscal could be less than Rs 30,000 crore as against the ambitious target of Rs 69,500 crore, the finance ministry may determine a rational target for sale of government stake in companies in the FY17 Budget.
This, sources said, is important to get revenue projections right to meet the additional burden of Rs 1.02 lakh crore due to implementation of the Seventh Central Pay Commission. “There is a need for setting rational targets by doing a scientific study to assess the likely market appetite for different stocks,” one source said. The government has missed the disinvestment target for the past six years precisely due to the practice of putting “plug numbers” for disinvestment in the budget, the source said.
Despite collecting Rs 12,700 crore in the first half of FY16, the highest disinvestment in such a period in the past seven years, the government is finding it tough to come out with any new sales. Perhaps, there won’t be any stake sales till end-December as market is volatile, investors have no appetite for PSU stocks and above all bankers would take leave for year-end vacations, sources said.
The latest stake sale in IOC, considered a robust stock, was rescued by government-owned LIC in August as both domestic and foreign investors shunned the market due to excess volatility on concerns on Chinese economy. Officials say though the government has a pipeline of about 20 PSU stock sales which could fetch it Rs 50,000 crore, they see no point bringing these issues to market and ask LIC to do the rescue act. Against the target of Rs 69,500 crore (Rs 41,000 crore through PSU stake sales and Rs 28,500 crore via strategic stake sales including privatisation of some PSUs), sources said there is no way even Rs 30,000 crore could be raised in the current fiscal.