Can the Govt meet disinvestment target in FY22?
While 2021 was a good year with the landmark sale of Air India, a lot needs to be done by the government to complete its disinvestment target in 2022.
- Dec 31, 2021,
- Updated Dec 31, 2021 5:49 PM IST
Disinvestment has remained the buzzword of 2021. And the most important event to mark this was the successful sale of the national carrier Air India to Tata group for Rs 18,000 crore, out of which only 15 per cent went to the government, the rest went to clear the huge debt of Air India. After many initial hiccups, Air India sale provided confidence to achieve the disinvestment target which was set at Rs 1.75 lakh crore for FY22. After successfully pulling off the Air India sale, the government is now going to carry out the LIC IPO going forward in 2022.
But this year as well, the chances of meeting the disinvestment target seems quite bleak as currently the government is running short of around Rs 60,000 crore to meet its ambitious disinvestment target of Rs 1.75 lakh crore. As per experts' estimates, over a third of the receipts were expected to come from LIC IPO and privatisation of BPCL.
As per sources, the BPCL divestment and IDBI banks divestment is unlikely to happen in FY22. Laying rest to the speculation, and raising questions about the feasibility of LIC IPO in FY22, the Department of Investment and Public Asset Management (DIPAM) clarified that the plan is on course for the LIC IPO in the last quarter of this fiscal and made this clear that LIC’s IPO will happen before March 31. The LIC IPO is expected to include offloading of up to 10 per cent government stake, which is estimated to fetch around Rs 80,000-1,00,000 crore for the government.
In the Union Budget 2021-2022, Finance Minister Nirmala Sitharaman announced the divestment of Shipping Corporation of India, Air India, Neelachal Ispat Nigam Limited, Container Corporation of India, IDBI Bank, BEML Limited and Pawan Hans, among others. In the Budget, the announcement of privatising two state-owned banks and one insurance company was also made.
Few days back, the DIPAM Seceretary, Tuhin Kanta Pandey took to Twitter to announce that the process of strategic disinvestment of Neelachal Ispat Nigam Limited has now moved to the concluding stage. In addition to this, announcement in regard to the divestment of Pawan Hans limited was also made saying that the process has now moved to the concluding stage.
In FY21, the government set a disinvestment target at whooping Rs 2.1 lakh crore and failed miserably to meet the target as the government ran short of Rs 1,78,000 crore. In FY20, FM Sitharaman had set a divestment target of Rs 1.05 lakh crore – which was the highest in India’s history. Historically, every passing year, the government missed its disinvestment target but what remains to be seen is what disivestment target government would settle for in the upcoming Budget.
Also Read: Can the Govt meet disinvestment target in FY22?
Also Read: Govt approves 19th tranche of electoral bonds for sale on January 1
Disinvestment has remained the buzzword of 2021. And the most important event to mark this was the successful sale of the national carrier Air India to Tata group for Rs 18,000 crore, out of which only 15 per cent went to the government, the rest went to clear the huge debt of Air India. After many initial hiccups, Air India sale provided confidence to achieve the disinvestment target which was set at Rs 1.75 lakh crore for FY22. After successfully pulling off the Air India sale, the government is now going to carry out the LIC IPO going forward in 2022.
But this year as well, the chances of meeting the disinvestment target seems quite bleak as currently the government is running short of around Rs 60,000 crore to meet its ambitious disinvestment target of Rs 1.75 lakh crore. As per experts' estimates, over a third of the receipts were expected to come from LIC IPO and privatisation of BPCL.
As per sources, the BPCL divestment and IDBI banks divestment is unlikely to happen in FY22. Laying rest to the speculation, and raising questions about the feasibility of LIC IPO in FY22, the Department of Investment and Public Asset Management (DIPAM) clarified that the plan is on course for the LIC IPO in the last quarter of this fiscal and made this clear that LIC’s IPO will happen before March 31. The LIC IPO is expected to include offloading of up to 10 per cent government stake, which is estimated to fetch around Rs 80,000-1,00,000 crore for the government.
In the Union Budget 2021-2022, Finance Minister Nirmala Sitharaman announced the divestment of Shipping Corporation of India, Air India, Neelachal Ispat Nigam Limited, Container Corporation of India, IDBI Bank, BEML Limited and Pawan Hans, among others. In the Budget, the announcement of privatising two state-owned banks and one insurance company was also made.
Few days back, the DIPAM Seceretary, Tuhin Kanta Pandey took to Twitter to announce that the process of strategic disinvestment of Neelachal Ispat Nigam Limited has now moved to the concluding stage. In addition to this, announcement in regard to the divestment of Pawan Hans limited was also made saying that the process has now moved to the concluding stage.
In FY21, the government set a disinvestment target at whooping Rs 2.1 lakh crore and failed miserably to meet the target as the government ran short of Rs 1,78,000 crore. In FY20, FM Sitharaman had set a divestment target of Rs 1.05 lakh crore – which was the highest in India’s history. Historically, every passing year, the government missed its disinvestment target but what remains to be seen is what disivestment target government would settle for in the upcoming Budget.
Also Read: Can the Govt meet disinvestment target in FY22?
Also Read: Govt approves 19th tranche of electoral bonds for sale on January 1