Govt set to double disinvestments this year

Total revenue pegged at Rs 55,000 crore; a fourth of this to be raised by selling stakes in private firms

The department of disinvestment may be gearing up for a bumper year as the finance minister has pegged the Miscellaneous capital receipts at Rs 55,814 crore, nearly doubling FY13 target of Rs 30,000 crore. Interestingly, the finance minister chose to keep quiet about this key and regular source of capital receipts in his budget speech.

Disinvestment of government’s equity holding forms a major portion of this at Rs 40,000 crore. In addition to this the government plans to raise Rs 14,000 crore by selling government stakes in non-government companies hinting sale of stakes in companies companies such as Balco and those held by Special Undertaking of UTI (SUUTI). SUUTI holds considerable stakes in companies such as Axis Bank, Larsen & Toubro and ITC.  A further Rs 1,814 crore is expected to be raised by write back of amounts with AMC. This is by far the highest disinvestment amount targeted by any finance minister so far.

In this fiscal so far, the government has raised Rs 21,400 crore and plans to raise Rs 24000 crore eventually according to the revised estimates given in the budget documents. In FY12, the government managed to raise Rs 18087 against the targeted Rs 25,000 crore.  Buoyant capital markets and innovative divestment mechanisms will have to be deployed to achieve the lofty target this year, market experts said.

The government is planning to launch a Exchange Traded Fund (ETF) to offload PSU stakes on a continuous basis. Companies with high government stakes such as Coal India (90 per cent) & NMDC (80 per cent) may be key disinvestment targets in the next fiscal.