Next fiscal, the govt is looking at listing of 14 central public sector enterprises on the domestic stock exchanges; it has started strategic disinvestment in 24 CPSEs
Had the government not overshot its disinvestment target in the current fiscal by Rs27,500 crore, its fiscal deficit slippage would have been bigger than 30 basis points (bps), which could have wreaked major fiscal havoc.
One of positive data in the Budget is the disinvestment number for the current fiscal, which Finance Minister Arun Jaitley said is estimated to come at Rs 1 lakh crore against the budgeted Rs72,500 crore.
The government was able to exceed the target after it sealed a disinvestment deal between two energy public sector undertakings (PSUs) last month, when the state-owned explorer Oil and Natural Gas Corporation Ltd (ONGC) picked over 51% stake in state-run refiner Hindustan Petroleum Corporation Limited (HPCL) at Rs36,915 crore. As per official figures, divestment, till January 11, was Rs54,337.60 crore.
Buoyed by the success in exceeding its disinvestment target this year, the government has set a an even more ambitious target of Rs80,000 crore for the next fiscal and Rs85,000 crore for fiscal after that. This includes offloading stake in government-run national air carrier Air India (AI) to the private sector, which could get the government substantial revenues.
Ranen Banerjee, partner and leader — public finance and economics, PwC India, said the divestment of AI and tranches of the exchange traded funds (ETFs) make the target for next fiscal "achievable".
"This is possibly the first time when the disinvestment targets have been exceeded and is pegged at 1 lakh crore. A higher target has been taken for the next year, too, at 80,000 crore. With Air India divestment on the anvil and further tranches of the exchange traded funds, the target looks achievable," he said.
Anis Chakravarty, partner and lead economist Deloitte India, sees disinvestment as a positive story.
"Broadly, the expenditure and revenue assumptions seem credible and should be achievable given the growth assumptions. The disinvestment story is clearly a positive, and there could be a positive surprise for the next year if the broader market sentiment holds positive," he said
Arvind Virmani, former chief economic advisor (CEA) to the Finance Ministry, believes a higher disinvestment goal in the next fiscal could have helped the government in making up for any shortfall in revenues from direct and indirect taxes and lowered the fiscal deficit target in the next fiscal.
"For me, the biggest disappointment is the overshooting of deficit targets for current and next fiscal years. Even though there are known reasons for tax and non-tax revenue shortfalls, a more aggressive disinvestment could have overcome them," he said.
Next fiscal, the government is also looking at listing of 14 central public sector enterprises (CPSEs) on the domestic stock exchanges. It has also begun strategic disinvestment in 24 CPSEs, including AI.
After raising Rs14,500 crore from ETF – Bharat-22 – the government is now expecting to raise more funds through debt ETFs in FY19.
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