Finance Minister Nirmala Sitharaman on Thursday said the government has set a 'realistic' disinvestment target in Union Budget 2021-22 and is confident of achieving it.
Accepting that the government has missed its disinvestment target over the last few years, Sitharaman said pandemic affected its plans in FY20, while a slowing economy and lack of appetite hit it in FY19.
However, the appetite is much better now, she said, adding that the stock markets had started doing well amidst the pandemic and have been doing better after the Budget announcement.
The government has set a 'realistic' disinvestment target without overestimation, and is confident of achieving it, she said.
Sitharaman was speaking on the issue of 'The Economic Rebound and the Indian Economy in 2021' at the Indian Institute of Management, Ahmedabad. The government has set a disinvestment target of Rs 1.75 lakh crore in FY22. The disinvestment target was revised to Rs 32,000 crore from Rs 2.1 lakh crore in FY21 in the Budget.
On the disinvestment and privatisation policy, the finance minister said the government would not completely shut public sector companies and they would be present in the identified strategic sectors. Private players are needed to fulfill the growing needs of the aspirational country.
The government's intention behind the policy is also to ensure that there are scaled up, well-managed and professionally run public sector enterprises in strategic sectors which are nimble, can run independently and stand up to the competition. She said enterprises cannot be 'laggard' and continue being a public sector undertaking as they are being run by taxpayers' money.
To a question on government's higher borrowing crowding out private sector investments, Sitharaman said it is not an issue currently as there is 'liquidity awash' in the market and the economy. Besides, as the government's borrowing plans are announced in advance, the market knows how to reorganise itself and there will be no crowding out effect.
"Also, many of the Indian companies are finding it easier to go and borrow from outside. So that leaves a bit more (liquidity) available within the country," Sitharaman said.
On a question on the recent price hikes in petrol and diesel, the finance minister said the Centre and states will have to talk to each other and reduce the taxes. The burden on common man should be reduced, she said without giving any timeline as to when the tax rates will be cut.
To a question on income tax and direct taxation, Sitharaman said while the government wants to increase the taxpayers' base, it also wants it to be simple and reasonable. She said the government has been working to bring down the tax rate for all segments and has reduced corporate tax rate to 15 per cent. Besides, it also came out with new tax slabs for income tax payers last year."In taxation, many of the old burdens are yet to be removed, I concede that. We will have to bring it all down so that it is reasonable, justifiable and bearable," the finance minister said.