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Govt misses disinvestment target, ends FY20 with nearly Rs 50,300 cr

The Ministry of Finance has missed its target and ended FY20 with a total disinvestment yield of Rs 50,298.64 crore, data accessed from the DIPAM showed
New Delhi: The government has missed its target and ended financial year 2019-20 with a total disinvestment yield of Rs 50,298.64 crore, data accessed from the DIPAM (Department of Investment and Public Asset Management) showed. PSU Watch had earlier reported that DIPAM’s disinvestment yield was likely to settle around Rs 50,300 crore by March-end. The total falls short of the target of Rs 65,000 crore by around Rs 15,000 crore.

Disinvestment target: The last two deals that led to the finale

The last two deals finalised by the government in the last days of March 2020 were NTPC’s acquisition of the Centre’s stake in THDC India and NEEPCO. The government raised Rs 11,500 crore from the deal, as was reported by PSU Watch. The other deal that took place was the sale of Kamarajar Port Ltd to Chennai Port Trust for a total of Rs 2,383 crore. An amount of Rs 600 crore came as remittances from SUUTI.

Why did the government miss the revised target?

The many OFS (offer for sale) that the government had initially planned were not taken up because of the volatile situation in the stock markets, owing to the Coronavirus pandemic and the subsequent shutdown and the crash in oil price. The government was relying on a number of minority stake sales to meets its FY2019-20 revised disinvestment target.

The backdrop

The Centre had revised its FY2019-20 disinvestment target from Rs 1.05 lakh crore to Rs 65,000 crore in February this year, as two major deals were pushed to the next fiscal — Bharat Petroleum Corporation Limited (BPCL) and Air India. For FY2020-21, the government has set a target of Rs 2.1 lakh crore, including Rs 90,000 crore which is expected to come from the sale of the Center’s stake in banks and financial institutions. The deadlines for Air India and BPCL sales have already been postponed in the backdrop of the worldwide Coronavirus outbreak.