India still has to mop up Rs 34,000 crore in three months to meet disinvestment target

The government has managed to garner only 48 percent of the budgeted amount for disinvestment for the current financial year, according to the Economic Survey. An amount of Rs 65,000 crore was budgeted as the disinvestment target in last year's Union Budget.

"The pandemic-induced uncertainty, the geopolitical conflict, and the associated risks have posed challenges before the plans and prospects of the government's disinvestment transactions over the last three years," according to the survey document.

However, the government is committed towards disinvestment and privatisation of Public Sector Enterprises by implementing the new Public Sector Enterprise Policy and Asset Monetisation Strategy, according to the survey.

Out of the proceeds mopped up so far, nearly half of that has come from India's largest IPO, where the government collected nearly Rs 21,000 crore by divesting 3.5 percent stake in Life Insurance Corporation of India (LIC).

An amount of Rs 4.07 lakh crore has been realised as proceeds from the disinvestment through financial year 2015 till date using various modes and instruments.

"The New Public Sector Enterprise Policy for Aatmanirbhar Bharat has thus been introduced to realise higher efficiency gains by minimising the presence of the government in the PSEs to only a few strategic sectors," the Chief Economic Adviser wrote in the survey.

For the next financial year, the disinvestment target from the government could be raised to not lower than Rs 75,000 - Rs 80,000 crore. Although the OFS needle has not moved much post LIC and ONGC, the issue of Hindustan Zinc is awaited in the current year.

A reason why the disinvestment target can be stepped up despite missing the mark this year is the potential completion of the IDBI Bank and Shipping Corporation transactions, which have moved to the next stage after receiving Expressions of Interest (EOI).

However, a report from Kotak Institutional Equities says that the disinvestment target for the next financial year could be cut to Rs 50,000 crore due to challenging market conditions.