Disinvestment Target: Disinvestment target will not be met in the current financial year. For FY 2021, the government had set a disinvestment target of Rs 2.1 lakh crore, a major portion of which would come from the strategic sale of BPCL, LIC IPO and privatization of Air India. Now the target of 2 lakh crore rupees can be set for the next financial year.
New Delhi. Corona virus epidemic has created problems for the central government even at the financial level. In the current financial year, the figure of disinvestment can reach only about 30-40 thousand crores, which will be the lowest in the last 5 years. The government had set a disinvestment target of Rs 2.1 lakh crore for the current financial year and now it is expected to meet only around 14-19 per cent. However, the government will keep the disinvestment target of Rs 2 lakh crore for the next financial year. Actually, from the strategic sale of BPCL to the IPO of Life Insurance Corporation of India (LIC) is also expected to be completed in the new financial year. Apart from this, some other Privatization Deals are also expected to be completed by FY 2022.
Out of the total disinvestment target set for FY 2021 this year, the government has got only Rs 17,958 crore, ie 8.5 per cent. The government has sold the remaining 26.12 per cent stake in Videsh Sanchar Nigam Limited to Tata Communications. The government will get Rs 8,000 crore of this deal by February-March.
Government may reduce stake in CPSE by March
Taking advantage of the recent boom in the market, by March, the central government can also sell shares in some CPSEs through Offer for Sale (OFS). Many CPSEs have already bought back their shares. Whereas, some other government companies, including Coal India, can also buyback some shares from the government before 31 March 2021. Even after this, the total amount of disinvestment will be the lowest in FY 2016 after Rs 23,997 crore.Target to sell stake in BPCL to be completed by FY 2022 The
government had targeted to sell 52.98 per cent stake in BPCL. But due to various delays, it is now expected to be completed by the next financial year. When it was proposed to sell this stake in BPCL in front of the Union Cabinet in November 2019, when it was valued at around Rs 60,000 crore. At the current market price, it has come down to Rs 44,500 crore. However, the actual amount will be known only after the valuation and premium.
LIC’s IPO also delayed
LIC’s IPO would also have been the second largest share in meeting the disinvestment target in the current financial year. Due to sluggish preparations, now LIC IPO will not be completed till March. On the basis of estimates, the valuation of LIC is about 8 to 11.5 lakh crore rupees. Accordingly, 80 to 1 lakh 10 thousand crore rupees can be raised through an IPO for a 10 percent stake.
full will be privatization of Air India in the next financial year
The process of financial bids for the privatization of the government airline Air India will also be possible by March-April. Officials hope that this deal will be completed by FY 2022. The bid for Air India will be around Rs 20,000 crore. The central government will be able to get Rs 3,000 crore in cash. Apart from BPCL, the Air India deal is also expected to be completed by 31 March 2021.
