Winning Bizness Sports Desk
Mumbai. There is very little possibility that India will be successful in raising even half of its target income from the planned sale of government companies in the current financial year. According to a report, the country will miss disinvestment targets for the fifth consecutive year and this will happen because the government's priorities change due to elections. Notably, Lok Sabha elections are going to be held in the country in 2024 and only a few months are left for this. Meanwhile, two government sources said the government may fall short of its disinvestment target by Rs 30,000 crore in 2023-24. India had set a target of Rs 51,000 crore from disinvestment for the current financial year ending March 2024.
Missing the deadliness
In FY 23-24, about Rs 30,000 crore of the target of Rs 51,000 crore was expected to be raised through stake sale in IDBI Bank and privatization of state-owned NMDC Steel. However, delays in vetting interested buyers for IDBI by banking regulator Reserve Bank of India (RBI) have pushed the timeline for the sale beyond the 2024 Lok Sabha elections. The sale of NMDC Steel will not be completed this year due to the state assembly elections and Lok Sabha elections next summer. The company's main plant is in the mineral-rich state of Chhattisgarh and unions here have opposed the sale. While India may still achieve some small disinvestments in the current financial year, it will still be well short of half its total target.
Modi govt failed to implement plans to sell companies
The Modi government has not been able to implement plans to sell companies in many sectors including steel, fertilizer and oil and gas since 2019, mainly due to issues like opposition from land owners and unions. According to government data, so far this year the government has received Rs 8,000 crore from stake sale. Some shortfall in the current year's target will be compensated by higher dividends paid by government companies to the government. These companies are paying higher dividends due to strong profits and stable demand. The government is expected to surpass its dividend target of Rs 43,000 crore and has so far received Rs 20,300 crore from government companies.
