Fiscal headache for North Block
The finance ministry is getting edgy over meeting its revised fiscal deficit target of 5.3% of GDP for 2012-13 ahead of the budget for the next fiscal year that would be presented next month, reports Mahua Venkatesh and Anupama Airy. Divestment Diarybusiness Updated: Jan 07, 2013 21:22 IST
The finance ministry is getting edgy over meeting its revised fiscal deficit target of 5.3% of GDP (gross domestic product) for 2012-13 ahead of the budget for the next fiscal year that would be presented next month.
With less than three months to go for the close of the current financial year, the disinvestment process is yet to gather steam, and there are concerns in North Block over revenues needed to bridge the deficit.
The government was betting on selling stakes in public sector companies and auctioning of spectrum for mobile telephony to bridge the gap between the government’s expenses and revenues.
The government is now banking on other avenues to generate revenue including special dividends from public sector undertakings and slashing expenditure wherever possible to adhere to the fiscal deficit target, said sources.
“The finance minister is very clear that the government needs to adhere to the projected target and the government is also looking at other ways to curb expenditure, though things look a little difficult at this point,” said a government official who did not want to be identified.
The only big-ticket disinvestment that is likely this fiscal is that of National Thermal Power Corp (NTPC), which is expected to fetch the government close to Rs.12,000 crore.
It is slated for the month-end or the first week of February. Before NTPC, the government has lined up 10% stake sale in Oil India sometime in January that is expected to rake in close to Rs. 2,700 crore.
The 9.5% stake sale in India’s biggest power company NTPC Ltd is likely to fetch the government between Rs.12,000 to Rs.13,000 crore.
Despite this, meeting the Rs.30,000-crore target in the next two-and-a-half months may be a tall order, the official said.
Other state-owned firms including Rashtriya Ispat Nigam, Hindustan Aeronautics have also been lined up disinvestment in the current fiscal year, but with less than three months to go, these appear unlikely.
Sale of government stakes in some blue-chip public sector firms including sale of 10.82% in SAIL, 12.15% in Nalco, 9.33% in MMTC and 5% in BHEL also seem unlikely this fiscal year.