Govt unlikely to meet Rs58,000-crore divestment target

The government is unlikely to achieve the Rs58,000 crore divestment targets set for the current financial year over the remaining eight months, as the road map for the sale of stake in public sector units is yet to be drawn up.

The government has put key assets such as Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL) and aircraft maker Hindustan Aeronautics Ltd (HAL) first off the block, but has made it clear that the schedule will be drawn based on expected realisation and the need to space out the issues.

The government proposes to sell 5 per cent stake in SAIL and 10 per cent each in RINL and HAL in the current fiscal, besides an outright sale of Tyre Corporation of India as part of its efforts to raise a little over Rs58,000 crore through sale of assets.

The sale of 10 per cent stake in Rashtriya Ispat Nigam Ltd (RINL) through an initial public offer (IPO) is "tentatively scheduled for completion in the current financial year", finance minister Arun Jaitley said in a written reply in the Lok Sabha.

Jaitley said the government hopes to complete the sale of a 5 per cent stake in SAIL also this fiscal.

Domestic road shows disinvestment in SAIL, which is likely to fetch about Rs1,800 crore, are expected to start by this month-end while the exercise to attract overseas investors will begin in the first week of September.

Meanwhile, minister of state for finance Nirmala Sitharaman said, "The department of disinvestment is presently engaged in disinvestment of only one such CPSE, namely Tyre Corporation of India (TCIL)."

Sitharaman said the government will consider outright sale of a CPSE only when all efforts to revive that loss making or sick CPSE fails.

Further, the cabinet has also approved sale of residual government equity in Hindustan Zinc and Balco.

In the budget, the government has estimated to collect Rs43,425 crore from selling stake in PSUs and another Rs 15,000 crore from sale of residual stake in the erstwhile government companies.

The government has raised a total of Rs53,671 crore in sale of stake in PSUs over the past three financial years, against a combined target of Rs1,10,000 crore. This means even 50 per cent of the divestment target could not be met.

Against the disinvestment target of Rs40,000 crore in 2013-14 the government had mobilised Rs15,820 crore while in 2012-13 of the Rs30,000 crore target Rs23,957 crore was raised and in 2011-12 only Rs13,894 crore of the Rs40,000 crore target could be met.