DoD wants disinvestment target to be scaled down to Rs 30,000 crore

The government has budgeted to raise Rs 69,500 crore through disinvestment in the current fiscal

The department of disinvestment (DoD) wants that PSU stake sale target for the current financial year be more than halved to Rs 30,000 crore in view of volatility in the stock markets. “The target of Rs 30,000 crore seems more reasonable for current financial year given that there is no big stock to sell,” a source said.

The government has budgeted to raise Rs 69,500 crore through disinvestment in the current financial year. Of this, Rs 41,000 crore is to come from minority stake sale in PSUs and the remaining Rs 28,500 crore from strategic stake sale.

With seven months of the current financial year about to be over, the government has been able to sell sell stake only in four companies — Power Finance Corporation (PFC), Rural Electrification Corporation (REC), Dredging Corp and Indian Oil Corporation (IOC) — to net Rs 12,600 crore.

For disinvestment in 2015-16, the government has a pipeline of over 20 PSUs for which it has Cabinet approval. These include, 10 per cent stake sale each in Oil India Limited (OIL), National Aluminium Company (Nalco), NMDC, and five per cent each in National Thermal Power Corporation Limited (NTPC), Oil and Natural Gas Corporation (ONGC) and Bharat Heavy Electricals Limited (BHEL). Besides, plans are afloat for a 10 per cent stake sale in Coal India. However, volatile market conditions have dented the prospects of a stake sale, with the recent disinvestments of IOC and PFC facing rough weather.

Domestic markets crashed by over 1,600 points on the day IOC offer for sale was launched. Similarly, the BSE Sensex fell by over 550 points on the day of PFC share sale.

In 2014-15, the government raised around Rs 25,000 crore against the target of Rs 58,425 crore. The Rs 58,425-crore target included Rs 43,425 crore from minority stake sale and Rs 15,000 crore from residual stake sale in erstwhile PSUs. The government has missed its disinvestment target for five consecutive financial years. In 2010-11 and 2011-12, the government had raised Rs 22,144 crore and Rs 13,894 crore through disinvestment, against the budgeted target of Rs 40,000 crore in each year.