Govt likely to raise disinvestment target for FY22 massively in Union Budget

• The CCEA has approved the government's new PSU disinvestment policy

• Sources in the know of the matter claimed that the Union Budget may hike the disinvestment target for FY2021-22 massively to around Rs 3 lakh crore

New Delhi: After a year of slow progress on big-ticket disinvestment plans on account of the Covid-19 crisis, the government is now likely to step on the accelerator for FY2021-22, sources who spoke to PSU Watch on the condition of anonymity said. The news comes a day after the Cabinet Committee on Economic Affairs (CCEA) is said to have approved the government's new PSU disinvestment policy which was unveiled by Finance Minister Nirmala Sitharaman in May 2020. Under the policy, the government had announced its intention to retain only one to four PSUs in strategic sectors and disinvest the rest in both strategic and non-strategic sectors.

Govt may up disinvestment target to Rs 3 lakh crore for FY22, say sources

After receiving a nod from the Cabinet, the government may now pursue its PSU disinvestment policy with a lot more aggression in order to raise revenue and walk the talk on the said policy. Sources in the know of the matter claimed that the Union Budget, which is expected to be unveiled on February 1, may hike the disinvestment target for FY2021-22 massively to around Rs 3 lakh crore. In the next financial year, the markets are likely to see more listings of PSUs as the government will undertake minority stake disinvestments, along with strategic disinvestment of PSUs, to give a push to its disinvestment policy.

ALSO READ: Disinvestment: DIPAM floats PIM, invites EoI for NINL privatisation

The backdrop

For the current financial year, the government has set a target of raising Rs 2.10 lakh crore through disinvestment. Out of this Rs 1.20 lakh crore is supposed to come from the sale of stakes in PSUs and the remaining Rs 90,000 crore from stake sale in LIC and IDBI Bank. However, because of the slowdown induced by the Covid-19 pandemic, most of the disinvestment processes that have been rolled out this year have seen very little progress. The Department of Investment and Public Asset Management (DIPAM) has so far managed to raise Rs 17,957.7 crore via disinvestment. 

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)