FM sets a target of ₹1.75 lakh crore from disinvestments

Government budgets Rs 1.75 lakh crore from stake sales in PSUs, after failing to meet last year’s target of Rs 2.1 lakh crore

SAIL, extended deadline, disinvestment, 3 steel producing units, The Federal, English news website
The Vizag plant is India’s first shore-based steel plant set up in 1971. As per the Budget 2021-22, asset sales will be key to bridging the government’s yawning budget gap, which will widen to 9.5 per cent of the GDP this year | Representational image: iStock.

The government on Monday budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including two PSU banks and one insurance company, in the next fiscal year.

Unveiling the PSE policy in Budget 2021-22, Finance Minister Nirmala Sitharaman said barring four strategic areas, public sector companies in other sectors will be divested. The policy would give a clear roadmap for disinvestment in strategic and nonstrategic sectors.

She said the strategic sale of IDBI Bank, BPCL, Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, among others, would be completed in 2021-22 fiscal year beginning April 1. Also legislative amendments required for LIC IPO would be brought in 2021-22.

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She said NITI Aayog has been asked to work on the next list of central public sector companies for strategic disinvestment.

The finance minister said a revised mechanism for fast-tracking of closure of loss-making PSUs would be worked out and an package would be developed to incentivise states to sell stakes in state PSUs.

The government’s aim is more modest this year when it comes to disinvestment. In 2020-2021 it had proposed to raise Rs 2.1 lakh crore through stake sales in PSUs, but fell considerable short. It has raised on Rs 19,499 crore from stake sells so far this year, according to the Department of Investment and Public Asset Management.

Asset sales will be key to bridging the government’s yawning budget gap, which will widen to 9.5 per cent of the GDP this year.

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