Budget 2024: 'Need to look at disinvestments in a holistic way,' says DIPAM Secretary Tuhin Kanta Pandey

DIPAM Secretary Tuhin Kanta Pandey stressed the need to look at disinvestments in a holistic way, including dividends, while also highlighting that the combined market capitalisation of all central public sector enterprises (CPSEs) today is ₹58 lakh crore.

Pandey highlighted that 61-listed CPSEs, 16 public sector enterprises (PSBs) and public sector insurance (PSI) firms have risen by over ₹42 lakh crore in three years, rising from ₹15 lakh crore at the start of 2021.

“This is actually the value unlocking, which has come. In one single year, the value unlocking is of ₹25 lakh crore and I think it's very important that we also reward our minority shareholders, and look at their needs, capital gains and dividends. At the same time, we keep on looking at our companies and how they perform. It was a very important segment of the economy. I think, if they do well, we have to calibrate the strategy; that's what we call a new paradigm—to look at one single number and just to do it in a particular year, come what may, that's not the way we should look at disinvestment or we should look at it holistically to include dividends,” Pandey told a CNBC-TV18 panel on Thursday to discuss Finance Minister Nirmala Sitharaman’s interim budget. The panel also included Finance Secretary TV Somanathan, DEA Secretary Ajay Seth and DFS Secretary Vivek Joshi.

The Centre has set its disinvestment target for financial year 2025 at ₹50,000 crore, Finance Minister Nirmala Sitharaman said in her interim budget presentation today. The FM additionally set the disinvestment target at ₹30,000 crore for the financial year 2024.

The government had earlier pegged the financial year 2024 disinvestment target at ₹51,000 crore. As of date, the government has managed to garner ₹12,504 crore in the financial year 2024 through stake sales in various companies like SJVN and NHPC among others.

Speaking about strategic divestments, Pandey said they are "time-taking," and while one needs to look at the opportunities in divestment but can't get fixated on any timeline or number.

"When the privatisation, strategic disinvestment transactions are launched, they take a lot of time, and whichever ones are going on, they are ongoing, and we are keeping them informed. But they are necessarily time-taking, particularly when you have other issues like demergers, non-core assets and so on. So all of them are actually onboard. But, as I said, when we are looking at the overall strategy, it has to be again look at the opportunities but don't get fixed about one number," Pandey told CNBC-TV18.

CNBC-TV18 had earlier reported that the timeline for a PSU privatisation is turning out to be at least 12–18 months from the day of submission of the expressions of interest.

The government expects dividends worth ₹48,000 crore from state-run companies in the financial year 2025, as per details in the budget documents. In combination with the Reserve Bank of India and other state-run banks, the government expects total dividends worth ₹1.5 lakh crore. Of this, ₹1.02 lakh crore will come from the RBI and PSU banks. For the financial year 2024, the government has increased the dividend receipts from the Reserve Bank of India and PSU banks to ₹1.04 lakh crore.