During the last fiscal year, the government could raise just 135 billion rupees (1.6 billion dollar) by selling the stakes in state-owned firms. It had set a target of 1.75 trillion rupees and thinking of divestment goal for a third straight year. The Indian government has set a divestment and privatisation target of 650 billion rupee (7.89 billion dollar) for 2022-23. From the amount it could raise 245.44 billion rupees during first seven months of the fiscal year
A Senior official finance ministry said that instead of chasing high divestment targets, the government of India should aim towards privatisation of state-run companies, on 18 October. By making such statement, he pointed towards market’s volatility and investors’ shaky appetite for risk.
During the last fiscal year, the government could raise just 135 billion rupees (1.6 billion dollar) by selling the stakes in state-owned firms. It had set a target of 1.75 trillion rupees and thinking of divestment goal for a third straight year.
According to a media agency report, the secretary in the Department of Investment and Public Asset Management (DIPAM), Tuhin Kanta Pandey said that India must have moderate targets and its focus should be on privatising.
The Indian government has set a divestment and privatisation target of 650 billion rupee (7.89 billion dollar) for 2022-23. From the amount it could raise 245.44 billion rupees during first seven months of the fiscal year.
The high targets set by government lead to a perception that it will sell minority stakes in state-run companies which may cause a fall in share prices of those firms, said Pandey.
Last year, finance minister Nirmala Sitharaman had announced privatise plans for all state-run companies keeping a few in strategic sectors like defence and telecommunications.
Pandey said the government by being at an advanced stage could invite initial bids to privatise state-owned logistics firm viz Container Corp of India and two former subsidiaries of Air India.
By the next fiscal year starting 1 April 2023, the sale of a majority stake in IDBI Bank may get complete, said Pandey. Early in October, India sent out invitation for initial bids to sell a 60.72 per cent stake in IDBI Bank.