The Finance Ministry is hopeful of raising Rs 12,000-13,000 crore from stake sale in the public sector undertakings (PSUs) by December—end which could help the government to rein in fiscal deficit to around 5.3 per cent of the GDP in 2012—13.
“We are hopeful that disinvestment will pick up and about Rs 12,000—Rs 13,000 crore will come in by December. For the full fiscal we expect to raise Rs 30,000 crore,” Department of Economic Affairs (DEA) Secretary Arvind Mayaram told PTI in an interview.
Finance Ministry officials are engaging in hectic parleys with the PSUs to speed up the process so that the disinvestments can take place in the December and March quarters.
The Department of Disinvestment (DoD), the modal department for conducting PSU stake sale, has already secured Cabinet approval for stake sale in four companies — Oil India, MMTC, Hindustan Copper and Nalco — which could fetch about Rs 15,000 crore to the exchequer.
“We have target a fiscal deficit at 5.3 per cent for the current fiscal. We aim to bring it down to 3 per cent by 2016—17,” Mayaram said, ruling out any further borrowing by the government.
“We will control the deficit by reducing our expenditure and realising funds from PSU disinvestment,” he said.
Although the government had pegged fiscal deficit for the current financial year at 5.1 per cent in the budget, it will not be able to achieve the target in view of rising subsidy bill and lower buoyancy in tax collection.
With nearly seven months of the fiscal about to get over, the government is yet to start its disinvestment programme, through which it aims to raise Rs 30,000 crore in 2012—13. PTI BKS JD CS TVS 10251635
The Department of Disinvestment has also initiated the process of stake sale in PSUs like NTPC, NMDC, PGCIL and Engineers India. Besides, RINL, SAIL and Neyveli Lignite are also on block for stake sale.
In the last fiscal (2011—12), the government could raise only Rs 14,000 crore from disinvestment, against the target of Rs 40,000 crore.
Mr. Chidambaram, soon after he assumed office in August, had appointed a three—member expert panel headed by former Finance Secretary Vijay Kelkar to suggest fiscal consolidation roadmap.
Among other things, the Kelkar panel recommended hike in price of cooking gas and kerosene, besides making a case for sharp reduction in oil and fertiliser subsidy. It had said that without reform initiatives and disinvestment, the fiscal deficit could shoot up to 6.1 per cent of GDP in 2012—13.
In order to check rising subsidy bill, the government has increased the price of diesel and capped subsidised LPG cylinders to six per family a year. It also initiated the move for cash transfer of subsidy to the needy with a view of checking pilferage and making government’s poverty alleviation programmes more effective.
During April-September period, gross direct tax collection rose by 5.9 per cent, as against the target of 15 per cent. Indirect tax collections grew at 15.6 per cent, against the annual target of 27 per cent.