Budget 2023-24: Asset sale target pegged at Rs 51,000 crore for FY24

Current year projection slashed to Rs 50,000 cr from Rs 65,000 cr

The Centre aims to raise Rs 51,000 crore through disinvestment of its stake in several state-run firms in financial year 2023-24 (FY24). This is 21 per cent lower than what it expected to earn in the current fiscal year.

The government has also slashed its projection for the current year to Rs 50,000 crore from the earlier target of Rs 65,000 crore.

The government has so far achieved just 48 per cent of the current year’s disinvestment target, and it has just two months to raise the remaining Rs 20,000 crore of the Revised Estimates (RE).

So far this fiscal year, the Department of Investment and Public Asset Management (DIPAM) has raised Rs 31,106 crore as disinvestment receipts and over Rs 36,000 crore as dividend.

The Budget did not mention new asset sales for FY24 — indicating that the Centre’s disinvestment target will depend on the completion of some big transactions, including the stake sale in IDBI Bank.

Some other important transactions that have spilled over into next year include the disinvestment in Shipping Corporation of India, NMDC Steel, BEML, HLL Lifecare, Container Corporation of India, and Vizag Steel.

Of the proceeds collected so far this year, a majority came from the initial public offering of LIC, through which the government raised Rs 21,000 crore by divesting a 3.5 per cent stake.

Explaining the rationale behind a lower target, DIPAM Secretary Tuhin Kanta Pandey said at a post-Budget briefing that these deals were dependent on market conditions.

Besides, to facilitate certain strategic disinvestments, the Budget proposed allowing accumulated losses and unabsorbed depreciation allowance to be carried forward in the case of merger of one or more banking companies with any other banking institution or a company subsequent to a strategic disinvestment, if such amalgamation takes place within five years of strategic disinvestment.

The government has budgeted for a 15.2 per cent increase in non-tax revenue at Rs 3 trillion in FY24, after a 28.3 per cent decline in FY23 compared to the preceding year.

Higher collections under non-tax revenue are expected to be led by “other non-tax revenues”, which are estimated to grow 22.3 per cent to Rs 1.8 trillion. The main components of this are receipts from petroleum (Rs 24,185 crore) and telecom (Rs 89,469 crore) sectors, which are budgeted to grow 37.3 per cent and 30 per cent, respectively, in FY24.

After a steep decline in dividends from the Reserve Bank of India (RBI) in FY23 at Rs 40,953 crore, against a Budget Estimate of Rs 73,948 crore, the government expects it to rise to Rs 48,000 crore in FY24.

The Centre expects to exceed the dividends target from public sector enterprises in FY23 by Rs 3,000 crore against a BE of Rs 40,000 crore. For FY24, the Budget has estimated such dividends at the same level as the RE for FY23 at Rs 43,000 crore.

Revising asset sale target
 

FY24 (BE): Rs 51,000 crore

FY23 BE: Rs 65,000 cr

FY23 RE: Rs 50,000 cr

Disinvestment receipts so far: Rs 31, 106 cr

Govt to raise remaining Rs 20,000 cr in two months

Govt's priority continues to be speeding up ongoing big-ticket deals

These include stake sale of IDBI Bank, Concor, Shipping Corporation, BEML, and NMDC Steel