NEW DELHI: Finance minister Pranab Mukherjee on Tuesday said the government has set a target of R30,000 crore from stake sales in state-run firms in the next fiscal. The figure is lower than R40,000 crore, which is the target for the current fiscal. In a written reply to a question in the Rajya Sabha, Pranab said, “The indicative targets for PSU disinvestment for 2012-13 and 2013-14 are R30,000 crore and R25,000 crore, respectively, which are based on the projected figures in the Medium Term Fiscal Policy Statement of the Union Budget for 2011-12.”
Despite frantic efforts, the government failed to garner R40,000 crore from divestment of PSUs in 2011-12. The modest figure indicates that the government is not sure whether the markets will rebound in the near term.
Also, there is a realisation that repeated failures to meet targets could be embarrassing for the policy makers even as it disrupts fiscal calculations.
Hard-pressed for funds, the government recently approved the proposal for expediting disinvestment through the buyback route under which blue-chip state-owned companies can buy their own stakes. The proposal is expected to help the government in the coming fiscal. The government till date has been able to raise R13,912 crore by offloading 5% in Oil and Natural Gas Corporation of India and follow-on public offer of Power Finance Corporation (PFC).
In 2010-11, the government earned R22,762.96 crore from stake sales in SJVN, Engineers’ India, Coal India, Power Grid, MOIL and Shipping Corporation of India. It decided to go slow on divestment due to poor market conditions and a windfall earning of over R1,00,000 crore from the auction of 3G spectrum that was more than sufficient to bridge the fiscal deficit.
In the current fiscal, the government postponed plans for stake sales in public sector firms like MMTC, SAIL, RINL, BHEL and Hindustan Copper. All these offers will be considered in the next fiscal.