The government is struggling to meet tax collection targets. Now, it seems the disinvestment proceeds may also fall short of the target by at least 25 per cent of the targeted Rs 80,000 crore. Can India achieve the fiscal deficit target of 3.4 per cent of GDP the government committed to in its Interim Budget?
The shortfall of Rs 35,000-45,000 crore is likely to stretch the deficit by 20 basis points. Now, the government has asked PSUs IOCL and ONGC to dish out a second round of dividends to bridge the deficit. IOCL and ONGC have given Rs 8,400 crore dividend (bulk of which went to the government). These PSUs have also contributed almost Rs 30,000 crore to the exchequer along with BHEL, Kochi Shipyard, NALCO, NHPC.
While IOCL did convene a meeting for March 19 to pay more dividend, the cash strapped ONGC refused to budge. The demand for more dividends is sure to hurt the health and fiscal discipline of these public sector units.