Union Budget 2015-16 announced a divestment target of Rs 69500 crore, higher than the previous fiscal’s target of Rs 58,425 crore.
The government has so far managed to raise only a small fraction of its ambitious divestment target. The break-up envisaged was thus: To raise Rs 36,925 crore from PSU disinvestments, Rs 15,000 crore from residual stake sale in Hindustan Zinc and Balco, and Rs 6500 crore from the stake it held in Axis Bank, Larsen & Toubro and ITC through SUUTI.
Coal India and Steel Authority of India ( SAIL ) divestments added Rs 22558 crore and Rs 1700 crore respectively. The other big stake sale of ONGC has been deferred beyond April due to low oil prices and absence of new subsidy sharing mechanism between the Centre and oil exploration companies.
The 2015-16 Union Budget was expected to set disinvestment target in the range of Rs 65,000-70,000 crore, the highest ever. There were strong buzz in the weeks leading to Budget that:
- Rs 45,000 crore would be mopped up from 5-10 percent stake sale in state-owned firmslike Oil and Natural Gas Corporation, Indian Oil, Bharat Heavy Electricals, National Aluminium, Dredging Corp, Container Corporation, Power Finance Corporation, Rural Electrification Corporation and NMDC.
- Rs 15,000-20,000 crore would come from residual stake sale in Hindustan Zinc and Bharat Aluminium (Balco)
- A further Rs 5,000 crore from partial stake sale of government holdings in private firms through SUUTI.
- Since there was wide spread expectation that Arun Jaitley would want to raise funding and incentives for Prime Minister Narendra Modi’s new centrally sponsored schemes, including Smart Cities, Swachh Bharat and Pradhan Mantri Jan Dhan Yojana, direct and indirect tax levies would be bumped up.
- The Centre may resort to year-round stake sales to meet divestment target.