Missing the mark: How will govt achieve divestment target for FY21

Even as 2020 was the best year for fundraising through the equity markets, it was a dismal one for the government's disinvestment plans. According to the data from the Department of Investment and Public Asset Management, only Rs 13,844 crore has been raised so far, against the target of Rs2.10 trillion for FY21.

Reduction in the government’s holding in 23 listed central public sector enterprises (CPSEs) to 75 per cent according to the Securities and Exchange Board of India’s (Sebi’s) norms can contribute over Rs 18,000 crore towards the target, according to PRIME Database. Further, the government has also placed a roadmap for several unlisted profit-making CPSEs to get listed and identified 45 CPSEs for strategic sale.

Among strategic sales, the government is already working on plans to divest Bharat Petroleum, Container Corporation, BEML, and Shipping Corporation. Inability to meet the disinvestment target had forced it to revise the target in previous years, as well.

The government cut its divestment target from Rs 1.05 trillion to Rs 65,000 crore in FY20. It also lowered the target in FY16 and FY17. With three months in this financial year, it needs to be seen whether the government will achieve the steep target for FY21.