Business Standard

Govt must set moderate divestment targets, says DIPAM Secretary

Last fiscal year, the government raised just over Rs 13,500 cr from the sale of stakes in state-owned firms, a fraction of its target of Rs 1.75 trn and missing its divestment goal for a third straigh

Secretary of Department of Investment and Public Asset Management (DIPAM) Tuhin Kant Pandey (Photo: PTI)

Secretary of Department of Investment and Public Asset Management (DIPAM) Tuhin Kanta Pandey (Photo: PTI)

Reuters New Delhi
The Indian government should focus on privatisation of state-run companies instead of chasing high divestment targets, a top finance ministry official said on Tuesday, pointing to market volatility and investors' shaky appetite for risk.
Last fiscal year, the government raised just over Rs 13,500 crore ($1.6 billion) from the sale of stakes in state-owned firms, a fraction of its target of Rs 1.75 trillion and missing its divestment goal for a third straight year.
"We should actually have moderate targets and more focus should be on privatising," Tuhin Kanta Pandey, secretary in the Department of Investment and Public Asset Management, told Reuters in an interview.
The Indian government has set a Rs 65,000 crore ($7.89 billion) divestment and privatisation target for 2022/23, out of which it raised 245.44 billion rupees in the first seven months of the fiscal year.
High targets lead to a perception that the government will sell minority stakes in state-run companies, prompting a fall in share prices of such firms, Pandey said.
Finance Minister Nirmala Sitharaman last year announced plans to privatise all state-run companies barring a few in strategic sectors such as defence and telecommunications.
Pandey said the government was at an advanced stage for inviting initial bids for privatisation of state-owned logistics firm Container Corp of India and two former subsidiaries of Air India.
The sale of a majority stake in IDBI Bank is likely to be completed in the next fiscal year that starts April 1, 2023, he said.
"Closure of IDBI Bank transaction will depend on response from interested bidders and time taken for due diligence."
Earlier this month, India invited initial bids to sell a 60.72% stake in IDBI Bank.
($1 = 82.3450 Indian rupees)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Oct 18 2022 | 7:04 PM IST

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