Thursday, December 26, 2019

Govt likely to miss disinvestment target leading to Rs 50,000 cr shortfall in budget

The government of India may not be able to augment the funds it had hoped to mop up through disinvestments in the public sector by the end of FY20 with the sale of Air India Ltd, Bharat Petroleum Corporation Limited (BPCL) and Container Corporation of India Limited (CONCOR) not being completed. According to a Livemint report, this will mean the government will fall short Rs 40,000 to Rs 50,000 crore in its budget.
The reason being attributed to the non-conclusion of the processes in these three is the overall economic slowdown.
This would also mean that the Finance Minister may not be able to stick to the fiscal deficit target of 3.3% or 3.4% for this year when she rises to present her second budget to the Parliament come February 1, 2020.
The government had set an ambitious disinvestment target of Rs 1.05 trillion for FY20, of which it has reportedly managed to garner only Rs 17,364 crore until now.
The stage at which the disinvestment process for the above three companies is that of releasing the expression of interest documents. The interested parties will first file these documents. The committee formed by the government will then scrutinize them and call for the selected ones to bid for the stakes.
The stakes on offer are 100% of the national carrier Air India, 53.29% of BPCL (that’s all the government holds now) and 30.8% of the 54.8% of CONCOR.
26/12/19 S. Mahadevan/News Minute

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