Govt banks on divestment, 3G | india | Hindustan Times
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Govt banks on divestment, 3G

india Updated: Feb 28, 2010 22:10 IST
HT Correspondent
HT Correspondent
Hindustan Times
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The government is banking heavily on disinvestment proceeds and auction of spectrum for third-generation (3G) telecom services to bolster its balance sheet. Nearly 40 per cent of the Centre’s total non-tax income is expected to come in from these two sources.

The government has estimated an earning of Rs 1,93,247 crore from non-tax sources, of which Rs 76,000 crore is expected to come in from 3G auction and stake sales in public sector undertakings (PSUs). While 3G auction, expected to fetch Rs 35,000 crore as revenue, is likely to be a one-year affair, disinvestment proceeds will emerge as the major source of revenue.

The government plans to raise at least Rs 40,000 crore annually over the next three years by selling stakes in PSUs.

“In the future, disinvestment receipts is estimated at the same level as budget estimates of 2010-11,” a senior finance ministry official said.

The government plans to raise Rs 25,000 crore in 2009-10 and Rs 40,000 crore from disinvestment in 2010-11. The government has raised about Rs 13,000 crore so far in 2009-10 by selling equity in PSUs.

Effectively, this would mean the government would raise Rs 13,000 crore more in 18 months than what it had done in 18 years since the disinvestment programme was launched in 1991.

Beginning April 2010, either an initial public offering (IPO) of an unlisted company or a follow-on public offer (FPO) of a listed firm is likely to hit the market every three weeks. This would result in about 30 IPOs or FPOs being floated in the market over the next two years.

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