Budget may boost PSU disinvestment target

Struggling to meet its budgeted disinvestment target of Rs. 30,000 crore for the 2012-13, the government is set to fix an even higher target of over Rs. 40,000 crore for the next fiscal year. Mahua Venkatesh and Anupama Airy report.

Struggling to meet its budgeted disinvestment target of Rs. 30,000 crore for the 2012-13, the government is set to fix an even higher target of over Rs. 40,000 crore for the next fiscal year. An announcement on this is expected to be made by finance minister P Chidambaram as part of his Budget proposals next month.

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“The government’s effort would be to fetch a much higher amount from disinvestment in 2013-14 and accordingly the disinvestment target for the next fiscal is likely to be a minimum Rs. 40,000 crore,” a senior government official, who did not wish to be identified, said.

The disinvestment exercise would be a key focus area for the government in 2013-14, in order to generate revenues to aid bringing down the fiscal deficit, currently targeted at 4.8% of the GDP in 2013-14 as against the 5.3% expected in 2012-13.

In 2011-12, the finance ministry could raise only Rs. 14,000 crore against the targeted Rs. 40,000 crore from disinvestment proceeds.

Similarly, the Budget in the current fiscal anticipated a Rs. 30,000 crore mop-up from disinvestments, but it is now expected that proposed stake sales may fetch only Rs. 20,000 crore, though some expect a higher amount.

NTPC is the only big-ticket disinvestment that is expected to fetch the government close to Rs. 12,000 crore. A sale of Oil India stocks, listed for February, is expected to add another Rs. 2,700 crore to the kitty.

The Cabinet recently cleared a disinvestment in Engineers India Ltd, but the share issue is well likely to slip to the next fiscal year despite the government’s best efforts to make it happen within this fiscal year.

Minority stake sale in a few PSUs such as NMDC, Hindustan Copper and NBCC have brought in about Rs. 7,000 crore.