The coronavirus outbreak and crash of crude price have hit the disinvestment plan of the government that planned to raise about Rs 2.1 lakh crore in 2020-21. The sale of Bharat Petroleum Corporation (BPCL) is in trouble because of the crash of crude price, while it's tough to find a buyer for Air India, especially when the global aviation sector is in doldrums after the outbreak. The sale of Container Corporation of India (Concor) has additional problems as its major valuation comes from the leased land that it took from Indian Railways at subsidised rates. Besides, the stock market crash is not a good news for the government, which wanted to divest its 47 per cent stake in IDBI Bank and 10 per cent stake in Life Insurance Corp of India (LIC). Overall, the government wanted to sell stakes in two dozen central public sector companies in 2020-21.
Rating agency Fitch Solutions said that India's fiscal deficit in 2020-21 may skyrocket to 6.2 per cent of the GDP from 3.5 per cent that the government estimated. They expect that the revenue collection will contract in this financial year because of the weak economic activity. Fitch Solutions said the receipts may contract by 1 per cent from a growth of 11.8 per cent previously. Moody's slashed India GDP growth in 2020 to 2.5 per cent, while KPMG estimated below 3 per cent growth. Fitch quoted a 2 per cent GDP growth. Disinvestment is one of the major options to bridge budget deficits in this kind of economic scenario.
05/04/20 Nevin John/Business Today
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Rating agency Fitch Solutions said that India's fiscal deficit in 2020-21 may skyrocket to 6.2 per cent of the GDP from 3.5 per cent that the government estimated. They expect that the revenue collection will contract in this financial year because of the weak economic activity. Fitch Solutions said the receipts may contract by 1 per cent from a growth of 11.8 per cent previously. Moody's slashed India GDP growth in 2020 to 2.5 per cent, while KPMG estimated below 3 per cent growth. Fitch quoted a 2 per cent GDP growth. Disinvestment is one of the major options to bridge budget deficits in this kind of economic scenario.
05/04/20 Nevin John/Business Today
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