Budget 2020

‘₹80,000 cr. target for divestment reachable’

Sunil Mitra. File

Sunil Mitra. File   | Photo Credit: The Hindu

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‘Current year’s margin fuels optimism’

The ₹80,000-crore target set for 2018-19 by Union Finance Minister Arun Jaitley on divestment is achievable, says former divestment secretary Sunil Mitra, who was also revenue and finance secretary.

“The very fact that the current year’s target was exceeded by a healthy margin paves the way for this optimism,” he said.

The 2017-18 Budget Estimates for disinvestment were pegged at ₹72,500 crore. This has been exceeded, Mr. Jaitley said, adding that he was assuming receipts of ₹1,00,000 crore in 2017-18. The 2018-19 disinvestment target is pegged at ₹80,000 crore, the Finance Minister said.

The government has approved listing of 14 CPSEs, including two insurance companies, on the stock exchanges. The government has also initiated the process of strategic disinvestment in 24 CPSEs. This includes strategic privatisation of Air India.

Two part guidelines dated January 2018 has been hosted on the official website of the Department of Investment and Public Asset Management (DIPAM).

The government introduced Exchange Traded Fund Bharat-22 to raise ₹14,500 crore, which was over-subscribed in all segments, Mr. Jaitley said.

DIPAM will come up with more ETF offers, including debt ETF. Ashish Kumar Chouhan, MD & CEO, BSE said that the disinvestment move augured well for the capital market.

Mr. Mitra said that during his time, about ₹40,000 crore was raised in 2010-11 through the divestment of companies like NHPC, Oil India and Mineral development Corporation. “However, these were done through the route of listing through the market discovery route,” he said.

Abhishek Rastogi, Partner Khaitan & Co., said that bigger disinvestment receipts and profits from PSUs could help government cover up the shortfall in non-tax revenues attributed by the Minister to deferment of spectrum auction.

‘Acceptable to unions’

Since 1991 and post liberalisation, the Centre’s divestment policy has evolved over time and now seems to have become more acceptable to the trade unions against virulent opposition that was mounted at the outset especially by the Left trade unions.

Under the present policy, the government pursues divestment mainly through minority stake sale in listed CPSEs, the government will retain control through a 51% holding.

However strategic disinvestment through sale of substantial government stake of upto 50% or more alongwith transfer of government control is also possible in certain identified CPSEs according to official sources.

Niti Ayog identifies the COPSEs forf strategic disinvest tment, while advising on the sale mode and the percentage of shares to be sold.

The Core group of secretaries on disinvestment will then consider the recommendations to facilitate a decision by the CCEA on strategic divestment and to supervise and monitor the implementation process.

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Printable version | Jan 26, 2020 1:24:59 AM | https://www.thehindu.com/business/budget/80000-cr-target-for-divestment-reachable/article22625127.ece

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