Plans also unclear on sales of any other assets, optimism remains on public offers
With the postponement of public offers (for share sales) of some of its companies, the government expects to miss its Rs 40,000-crore disinvestment target this year by almost half. Finance Minister Pranab Mukherjee said higher than expected revenue from the sale of telecom bandwidth allowed the government to reschedule some of the public issues.
The disinvestment target for 2011-12 has been maintained at Rs 40,000 crore, though there are fewer big companies on its list for next year. Public offers of Oil and Natural Gas Corporation and Steel Authority of India will be made in the current year (ending March 31) itself, though proceeds from the issues would flow into government coffers only the next year, said disinvestment secretary Sumit Bose. Disinvestment of five per cent government equity each in ONGC and SAIL is expected to generate around Rs 17,000 crore. This would help the government meet its target next year, leaving around Rs 25,000 crore to be raised from other issues.
The finance minister remained buoyant on next year’s disinvestment programme but did not budget any income from sale of other assets, such as telecom bandwidth. “A higher than anticipated realisation in non-tax revenues has led us to reschedule some of the divestment issues planned for the current year. I intend to maintain the momentum on disinvestment in 2011-12 by raising Rs 40,000 crore,” he said. The government has raised Rs 22,744 crore this year through disinvestment in six companies.
Total non-tax revenue is expected to be Rs 1,25,435 crore in 2011-12, about 43 per cent lower than the Rs 2,20,148 crore estimated in the current year. The non-tax revenue increased by almost 50 per cent during 2010-11, due to Rs 1,20,806 crore coming in from auction of second generation and broadband wireless access spectrum. The telecommunication sector is expected to give Rs 29,648 crore in 2011-12, mainly through payment of licence fee and entry of new providers.
Revenue from dividends and profits during 2011-12 is also expected to be lower, at Rs 42,624 crore, about 13 per cent lower than the revised estimate for the current year.
The government intends to use the proceeds raised from disinvestment to reduce its fiscal deficit and invest in social and infrastructure projects. “The government is committed,” said Mukherjee, “to retain at least 51 per cent ownership and management control of CPSUs, as stated earlier in my Budget speech for 2009-10.”
So far this financial year, the government has sold stakes in power producer SJVN, Engineers India, Coal India, Power Grid, MOIL and Shipping Corporation of India. High crude oil prices had forced the government to push its disinvestment plan in Indian Oil Corporation to next year.