Interim budget 2014

Interim budget 2014: Govt resets disinvestment target to Rs 36K cr

  • HT Correspondent, Hindustan Times, New Delhi
  • |
  • Updated: Feb 18, 2014 12:22 IST

The government has set a target of Rs 36,925 crore that it expects to earn by selling equity in state-owned companies in 2014-15 even as it halved target by more than half to Rs 16,027 crore for the current financial year.

In the Budget last year, finance minister P Chidambaram had estimated to mobilise Rs 40,000 crore by selling minority stakes in state-owned companies.

As per the interim Budget 2014-15 presented in Parliament, the receipts from disinvestment for 2013-14 have been revised downward to Rs 16,027 crore from Rs 40,000 crore.

Till date, the government has been able to raise about Rs 3,500 crore by selling stake in public sector companies. Over the medium term frame work, an amount of  Rs 55,000 crore each has been taken for the years 2015-16 and 2016-17.

From the current financial year 2013-14 government decided to create a separate fund, NIF under Public Account, with the intent that proceeds from disinvestment will only be deployed for specific authorized purposes.

Besides, the government’s persistence on goading public sector companies to to pay more dividend seems to have worked as the exchequer got Rs 88,188 crore in this financial year, which is Rs 14,320 crore more than the earlier estimate.

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As per the budget document presented in Parliament, public sector enterprises, including banks, are expected to contribute Rs 88,188 crore in the form of dividend and profit to the government in the current financial year.

Originally, the government had expected to get Rs 73,866 crore, of which Rs  29,870 crore had been targeted from PSUs and Rs 43,996 crore from banks.

The government estimates it will get Rs 77,229 crore from dividend and profits in 2014-15.

Last month, state-owned Coal India Limited (CIL) paid an interim dividend of Rs  29 a share or Rs 18,317 crore during 2013-14. The government, which holds 90% stake in the company, will earn Rs 16, 485.71 crore from the move, emboldening its efforts to keep the fiscal deficit under check.

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India is battling to keep the fiscal deficit —a measure of the amount of money the government borrows to fund its expenses — within budgeted 4.8% of GDP this year.

Earning extra revenues through state-controlled companies’ dividends and selling equity in such companies is critical for this year’s central budget math

Finance minister Chidambaram met chairmen of top public sector undertakings including CIL, ONGC and Indian Oil triggering widespread anticipation about a series of CIL-type announcements on dividend payments by other state-owned firms.

 

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