homeeconomy NewsBudget 2023: Government sets disinvestment target of Rs 51,000 crore for next financial year

Budget 2023: Government sets disinvestment target of Rs 51,000 crore for next financial year

Budget 2023: Government sets disinvestment target of Rs 51,000 crore for next financial year
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By CNBCTV18.com Feb 1, 2023 6:01:09 PM IST (Updated)

Based on the revised numbers, the government has managed to collect over 60 percent of the target for the current financial year.

The union government aims to earn Rs 51,000 crore through the disinvestment of its stake in various state-run companies during the next financial year.

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Additionally, the government has also slashed its current year disinvestment target to Rs 50,000 crore from the earlier target of Rs 65,000 crore.
With multiple transactions moving to the next stage of completion, the government's disinvestment target for the next financial year will hinge on the completion of some important deals.
This leaves the government with another two months to collect the remaining Rs 20,000 crore of the revised estimates.

Out of the proceeds mopped up so far this year, most have come from India's largest IPO, where the government collected nearly Rs 21,000 crore by divesting 3.5 percent stake in Life Insurance Corporation of India (LIC).

Besides LIC, the government also raised Rs 3,026 crore through ONGC's Offer for Sale (OFS) and by selling a 19.55 percent stake through Paradeep Phosphates Ltd.'s IPO for Rs 471.55 crore.

However, the OFS needle has not moved much post LIC and ONGC, the issue of Hindustan Zinc is awaited in the current year.

Potential transactions that are likely to be completed next year, are IDBI Bank and Shipping Corporation transactions, which have moved to the next stage after receiving Expressions of Interest (EOI).
An amount of Rs 4.07 lakh crore has been realised as proceeds from the disinvestment through financial year 2015 till date using various modes and instruments.
A report from Kotak Institutional Equities had earlier mentioned that the disinvestment target for the next financial year could be cut to Rs 50,000 crore due to challenging market conditions.

The government has missed its disinvestment targets set over the last four years.

YearDisinvestment Target (Rs. Crore)Disinvestment Proceeds (Rs. Crore)
FY23 (So Far)50,000 (Revised)31,116
FY2278,000 (Revised)13,530
FY211.75 lakh32,835
FY2065,000 (Revised)50,298
FY181 Lakh1,00,056.91

Due to the continued impact of the pandemic, the government could only mop up Rs 13,531 crore as disinvestment proceeds, compared to the original target of Rs 1.75 lakh crore, which was later lowered to Rs 78,000 crore.

For financial year 2020-21, the government had raised Rs 32,886 crore against a target of Rs 2.1 lakh crore.

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