With more than seven months of this fiscal already over, the Centre is looking at some big-ticket strategic disinvestment of CPSEs, including Bharat Petroleum Corporation (BPCL), to achieve the massive FY20 disinvestment revenue target of Rs 1.05 lakh crore and partly make up for the expected shortfall in tax revenue collections.
The Cabinet has given an ‘in-principle’ approval for the sale of strategic stakes in as many as 28 central public sector enterprises (CPSEs), including Air India, minister of state for finance Anurag Singh Thakur said on Monday, hinting at a renewed, aggressive push for disinvestment in FY20 amid expectations that tax revenue would fall way short of the budgetted targets.
With more than seven months of this fiscal already over, the Centre is looking at some big-ticket strategic disinvestment of CPSEs, including Bharat Petroleum Corporation (BPCL), to achieve the massive FY20 disinvestment revenue target of Rs 1.05 lakh crore and partly make up for the expected shortfall in tax revenue collections. The Centre’s 53.3% stake in fuel retailer BPCL could fetch it Rs 60,000-70,000 crore. “The (final) decision regarding strategic disinvestment of BPCL has not yet been taken by the CCEA,” Thakur said.
So far this fiscal, the government has raised Rs 17,364 crore, or 16.5% of the budgetted target, Thakur said in a written reply in the Lok Sabha.
Of the 28 CPSEs that Thakur spoke about, the government stakes in five companies — Hindustan Petroleum Corporation, Rural Electrification Corporation, Dredging Corporation of India, HSCC (India) and National Projects Construction Corporation — were sold in CPSE-to-CPSE deals in FY18 and FY19. While these deals fetched the Centre as much as Rs 53,329 crore, some of the sheen was taken away by the fact that none of these CPSEs was privatised.
In ailing Air India, the Centre might take over an additional debt of close to Rs 20,000 crore before offering the company to potential buyers later this fiscal. Earlier in this fiscal, the Centre had taken over a debt of Rs 29,464 crore from the ailing carrier’s balance sheet through a special purpose vehicle. As of March 31, Air India had debt and liabilities of Rs 73,255 crore (including a long-term debt of Rs 58,255 crore).
High level of debt was one of the reasons why no buyer showed interest for the national carrier last fiscal earlier, forcing the Centre to call off the process.