Disinvestment secretary Neeraj Gupta speaks on the impact of long term capital gains (LTCG) tax on the stock market, strategic disinvestment of Air India as well as the disinvestment target for 2018-19.
On the impact of LTCG tax on stock markets:
First of all the (financial) markets should not be viewed purely in terms of the budget. There is a lot happening in the world. If you see the markets around the world, you have to watch how they are behaving, it is very difficult to say that it is a reaction to LTCG. LTCG is definitely not a big issue. It will get factored in, it has already got factored in.
On the strategic disinvestment in Air India and Pawan Hans:
I can assure you that all these transactions are maturing pretty fast. We have started strategic divestment after a gap of 12 years. So it has taken a little time. Seven of them have already hit the market, many more will. Strategic disinvestment is not for raising money. It is a wider concept of management of investment whereby we want to create or unlock the value of our enterprises which we are not able to do in our own hands. We are giving it to those who are bringing in more capital, management, efficiencies, technology and they can expand.
ETF: Priority this year
In the finance bill, there is a provision of “fund of fund”, which is designated, which is being invested in a designated ETF (exchange traded fund). Earlier the treatment of this “fund of fund” investment was of debt. The finance bill suggests that it will be treated as equity now. So any fund of fund which is designated to invest in an equity ETF, will be having a treatment in the hands of the investor.
On disinvestment target for 2018-19 vs 2017-18:
We have definitely done better than Rs72,500 crore which was the target for 2017-18.
We have logged Rs92,500 crore till today. The expectation of Rs80,000 crore (in 2018) is a pretty big expectation. But, if the budgetary requirements are there, all endeavours will be made.
On the calendar for disinvestment:
I can assure you that most of the deals are on track, they are progressing and in very advanced stages. You can definitely see them getting concluded. Seven of the deals are already in expression of interest stage. Even if you call it strategic divestment, a special sale has to go through the whole process of strategic divestment.