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    Centre may hike disinvestment target in Budget 2022; LIC IPO holds the key: Report

    Centre may hike disinvestment target in Budget 2022; LIC IPO holds the key: Report

    Centre may hike disinvestment target in Budget 2022; LIC IPO holds the key: Report
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    By CNBCTV18.com  IST (Published)

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    Some economists had a different take, saying even if the LIC IPO went through this fiscal, the government's target for next year could be lower as it has no big-ticket divestments lined up for FY23.

    The Centre is likely to set a higher disinvestment target for the next financial year in the Union Budget 2022 than this year’s Rs 1.75 lakh crore, Mint reported, quoting two people aware of the development. However, sources said a lot would depend on the performance of the of Life Insurance Corporation (LIC) IPO.
    Till now, the government has raised around Rs 12,300 crore in this fiscal through stake sale and privatisation, The Economic Times had reported. The total includes Rs 9,329.90 crore through sell-offs in NMDC, HUDCO and SUUTI stake sale in Axis Bank.
    The Centre is looking to meet its disinvestment deficit this fiscal through the public listing of the country’s largest insurer before the end of March. The process of listing is progressing well, with the government planning to file the draft red herring prospectus (DRHP) with the market regulator by January 31, Bloomberg reported.
    “LIC is the biggest factor here; if it happens this year, then the target (for FY23) could change," a source told Mint, adding that the disinvestment target for the next fiscal could be a little higher than this year.
    Discussion on a higher disinvestment target for FY 2023 is going on and a final call will be taken soon on the issue, another source told Mint.
    The finance ministry and the department of investment and public asset management did not comment on the matter.
    Meanwhile, some economists said even if the government successfully listed LIC in this fiscal, the target for next year could be lower as it has no big-ticket divestments lined up for FY23, Mint reported.
    “We expect the target for FY23 to be lower than Rs 1.75 lakh crore, assuming LIC happens in the next few months,” Mint quoted Madan Sabnavis, Chief Economist at Bank of Baroda, as saying. According to Sabnavis, next year’s target could be around Rs 1.25 lakh crore. However, the government could retain the same target if the LIC IPO does not happen in this fiscal, he said.
     
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