Nearly doubling the target of disinvestment from the actual collections made in the current fiscal, finance minister Arun Jaitley has set the stage for a daunting target of garnering Rs. 69,500 crore through public sector undertaking (PSU) disinvestment and strategic sale of equities in 2015-16.
For the current fiscal, disinvestment yields are projected at Rs. 31,350 crore in the revised estimates as against the earlier budgeted estimate of Rs. 58,425 crore.
“The Budget reflects considerable scaling up of disinvestment figures. This will include both disinvestment in loss-making units and some strategic disinvestment,” Jaitley said in his budget speech.
Meanwhile, addressing the media later in the day, he said the government has a clear road map planned but he did not name any entity where the disinvestment will be made.
On the other hand, even as the target is doubled for the next fiscal, experts said the actual receipts can only touch the said target if the capital markets remain buoyant.
“It would be challenging to achieve the targeted figures in the coming year unless there are specific efforts to increase the valuations of the assets that would be disinvested. It would also depend on the capital market prevalent at the time of devaluation. As the US is tapering off its Quantitative Easing (QE), flow of FII funding might dry up. However, if the conditions continue to stay favourable and if there is a broad-based support for the initiative, the government might even cross this targeted disinvestment, which would actually unlock the value of these government assets, and the revenues generated will hopefully redeploy for productive planned expenditure by the government,” said Jaijit Bhattacharya, partner, Infrastructure and Government Services, KPMG in India.
Till now, the government has raised about Rs. 24,500 crore through disinvestment in SAIL and Coal India in the current fiscal. It expects to raise Rs. 6,850 crore in the remaining one month of the fiscal ending March.