You are here: Home » Budget » News
Business Standard

Budget 2020: Govt pegs disinvestment target for FY21 at Rs 1.20 trillion

Sitharaman in her Budget Speech also proposed listing of LIC on the stock exchanges through an initial public offer

Budget 2020 | Disinvestment | Disinvestment of PSUs

Press Trust of India  |  New Delhi 

In 2019-20, after a gap of 2 years, the government has missed the disinvestment target set in Budget

The government on Saturday pegged target for 2020-21 at Rs 1.20 trillion, nearly double of Rs 65,000 crore it expects to raise in the current financial year.The government has missed the budgeted target of Rs 1.05 trillion set for the current financial year by a huge margin.

In the current financial year so far, the government has mopped up about Rs 18,000 crore by way of The Revised Estimate pegs disinvestment proceeds at Rs 65,000 crore for this fiscal ending March 2020.

For the next financial year, beginning April 1, the government expects a substantial Rs 90,000 crore revenue from disinvestment of government stake in public sector banks and financial institutions. This would help the government achieve the Rs 1.20 trillion total disinvestment proceeds for 2020-21.

Finance Minister Nirmala Sitharaman in her 2020-21 Budget announced selling of part government stake in insurance behemoth Life Insurance Corporation (LIC), beside selling the balance holding of the government in IDBI Bank to private, retail and institutional investors.

"In the last few years, the government has taken concrete steps to bring our banking system to be robust. However, there is a need for greater private capital. Accordingly, it is proposed to sell the balance holding of Government of India in IDBI Bank to private, retail and institutional investors through the stock exchange," she said in her Budget Speech.

The government currently holds 47.11 per cent, while LIC is the majority shareholder holding 51 per cent stake in IDBI Bank.

In August last year, the Cabinet approved selling the government's controlling stake in IDBI Bank to LIC, which is currently 100 per cent government-owned. Sitharaman in her Budget Speech also proposed listing of LIC on the stock exchanges through an initial public offer.

"Listing of companies on stock exchanges discipline a company and provides access to financial markets and unlocks its value. It also gives opportunity for retail investors to participate in the wealth so created. The government now proposes to sell a part of its holding in LIC by way of initial public offer (IPO)," she said.

In the financial year 2016-17, the government had missed the budgeted disinvestment target. While the Budget had pegged target at Rs 56,500 crore, the government was able to mop up Rs 46,247 crore.

In 2019-20, after a gap of 2 years, the government has missed the disinvestment target set in Budget.

In 2017-18, it bettered the target of Rs 1 trillion and raised a record Rs 1,00,056 crore. In 2018-19, the disinvestment mop-up stood at Rs 84,972 crore as against the Budget target of Rs 80,000 crore.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, February 01 2020. 17:35 IST