The government expects to meet its disinvestment target of ₹80,000 crore even though it has achieved only ₹56,473.42 crore so far with only 15 days left for the end of the financial year, according to a senior official in the Finance Ministry.
The government hopes that the Power Finance Corporation’s (PFC) acquisition of the Rural Electrification Corporation (REC), expected to be completed ‘soon’, would push disinvestment proceeds above the target.
In addition, the ongoing Initial Public Offering (IPO) of Mini Ratna company MSTC is also expected to earn more than ₹1,000 crore.
“We are of the hope that the target is still within reach,” the official said on the condition of anonymity, as the government cannot make formal announcements under the Election Commission’s Model Code of Conduct in the run-up to the general elections.
“The last few months have seen collections pick up, especially due to the Bharat-22 ETF, and the sale of the SUUTI stake in Axis Bank.”
Bharat-22 ETF sale
The government collected over ₹10,000 crore from the Bharat-22 ETF sale in February, and another ₹5,378.66 crore from the sale of Specified Undertaking of Unit Trust of India (SUUTI) stake in Axis Bank.
So far, the government has collected a total of ₹56,473.42 crore from disinvestments and stake sales. It retained the target of ₹80,000 crore for the current financial year and set a target of ₹90,000 crore for the next year.
In 2017-18, the government earned ₹1,00,056.91 crore from disinvestment against a target of ₹72,500 crore.
“In the remaining period, we are hopeful that the PFC acquisition [of REC] will take place soon, which could push us over the target,” the official added.
“It is unlikely that we will achieve the success of last year, however.”
He added that the ongoing IPO of State-owned e-commerce firm MSTC will mop up more than ₹1,000 crore. The IPO is to end on Friday.
Ratings agencies, however, feel that the government would miss its disinvestment target for the current year.
Care Ratings predicted that the volatility in the financial markets would result in the government collecting only ₹60,000 crore this year.