The central government raised a record 1 lakh crore rupees in FY 2018 and 85 thousand crores rupees in FY 2019 by selling its stake in various companies. Out of this, only government companies bought stakes in some companies.
So far in the current financial year, the government has managed to raise only 3% of the total target, it will also sell stake in companies like Mishra Dhatu Corporation, IRFC, RailTel
Even after the bad market conditions, the central government can raise one lakh crore rupees this year. This money will be raised by selling (disinvestment) shares in government companies. However, even after raising so much money, the government will be far behind the target. This fiscal, the government had set a target of raising 2.1 lakh crore in the budget.
The government can stay away from the target by selling a stake in major companies
According to a government official, even after selling stakes in major state-run oil companies Bharat Petroleum Corporation Limited (BPCL), Container Corporation (CONCOR) and IDBI Bank, the government may remain far from the target. Recently, the central government has announced not to change the increased borrowing limit of Rs 12 lakh crore in the second half. Actually, the government had targeted to raise Rs 80,000 crore by selling 10% stake in LIC. If this is done then the government can easily raise 2.10 lakh crore rupees.
It is not possible to achieve the goal
Sources say that it is not possible to achieve the target in this financial year. Similarly, Air India has not been sold yet. This will also create a decrease in government revenue. Please tell that 6 months of the current financial year has been completed. So far, the government has not been able to sell stake in BPCL. The government is to sell 52.98% stake in it. In lieu of this, the government can get 39 thousand 69 crore rupees. In November 2019, the government used to get 60 thousand crores from this share.
This is because the company’s stock has fallen drastically since then. This has reduced its price by 35%.
Valuation and premium will be considered
However, the assessment and premium will also be considered by the government. ONGC bought the Centre’s stake in HPCL at a premium of 14% of the stock price in FY 2018. The government has recently raised the bid limit for BPCL to 16 November. Similarly, the government can get Rs 18 thousand 995 crore for its 47.1% stake in IDBI Bank. LIC had bought 51% stake in this bank in January 2019. She is the biggest promoter.
Stake in concor will be sold
The government will soon issue EOI for sale of 30.8% stake in Concor. Despite the short time, it can be completed by 31 March. The government can get Rs 6,957 crore through this at the current share price. Similarly, the Central Government’s 63.75% stake in Shipping Corporation of India (SCI) is valued at Rs 1,547 crore and 54.03% stake in BEML at Rs 1,353 crore. The government will sell stake in all of these soon. Apart from this, strategic sales of Pawan Hans and Central Electronics are also being fast tracked.
The government had raised one lakh crore rupees in FY 2018
The central government raised a record 1 lakh crore rupees in FY 2018 and 85 thousand crores rupees in FY 2019 by selling its stake in various companies. Some of these companies were bought by government companies. An official said that stakes could be sold to some government companies even this year. So far in the current financial year, the Center has raised only 3% of the total target i.e. Rs 6,389 crore.
15% stake in IRCTC to be sold
Similarly, the government will sell about 15% stake in IRCTC through Offer for Sale (OFS). This can fetch Rs 3,200 crore at today’s price. The sale of 10% stake in Mishra Dhatu Nigam (Midhani) through OFS is expected to fetch Rs 400 crore. The government can get Rs 4000 crore from the IPO of Indian Railway Finance Corporation (IRFC) and Rs 1000 crore from the IPO of RailTel.
The biggest problem for the Air India government
Under the current scheme for Air India, the bidder will have to take a loan of Rs 23,286 crore out of its loan of Rs 60,000 crore. Therefore, on a net basis, the deal will not provide any cash to the central government. There has been a decline of around 30% in net tax revenue in April-August. Analysts estimate the fiscal deficit of the central government to be Rs 16 lakh crore in FY 2021. This is double the budget level of 8 lakh crores.