Budget 2022: Govt makes huge cut in PSU disinvestment target for FY23

Synopsis: Faced with difficulties in meeting the budgeted disinvestment targets for FY22, Finance Minister Nirmala Sitharaman has reduced the target of disinvestment receipts for FY23 to Rs 65,000 crore which is even less than the revised estimate of the receipts for the ongoing financial year at Rs 78,000 crore. The target for the FY22 was Rs 1.75 lakh crore earlier, so, clearly, it is a drastic reduction
Budget 2022: Govt makes huge cut in PSU disinvestment target for FY23

New Delhi: The government has made a drastic cut in the disinvestment target for the next financial year (FY23) in the Budget 2022-23 as it settled at a figure of Rs 65,000 crore, shows the fine print of the Budget document. The FY23 disinvestment target is even lower than the current year's estimated mobilisation of Rs 78,000 crore, which is again a revised estimate. The target for FY22 was Rs 1.75 lakh crore earlier. In FY22, the government has so far received Rs 12,030 crore from PSU disinvestments and strategic sale. This includes Rs 2,700 crore from Air India privatisation and another Rs 9,330 crore through minority stake sale in various Central Public Sector Enterprises (CPSEs).

Because of the COVID-19 pandemic, big-ticket disinvestment of Bharat Petroleum Corporation Ltd (BPCL), and other PSUs like Shipping Corporation of India (SCI), Container Corporation of India (CCI), RINL and Pawan Hans have delayed significantly.

The decision to revise the FY22 disinvestment target to Rs 78,000 crore has raised questions over whether the government's optimism over concluding the Initial Public Offer (IPO) of LIC in the current financial year. The IPO is expected to fetch Rs 90,000 crore alone. In her Budget speech on Tuesday, Finance Minister Nirmala Sitharaman had started her speech by saying that the listing of LIC can be expected "soon."

For various reasons, the government has missed the disinvestment target for three consecutive years. In 2020-21, as against the budgeted disinvestment target of Rs 2.10 lakh crore, the government had mopped up Rs 37,897 crore. In 2019-20, the disinvestment receipts stood at Rs 50,298 crore, lower than the revised estimates of Rs 65,000 crore and Budget estimate of Rs 1.05 lakh crore.

In 2018-19 and 2017-18 fiscal, the government had exceeded the disinvestment target set in the Budget. In 2018-19, the disinvestment mop-up stood at Rs 84,972 crore, as against the Budget target of Rs 80,000 crore. In 2017-18, it bettered the target of Rs 1 lakh crore and raised a record Rs 1,00,056 crore.

In 2016-17, the government had missed the budgeted disinvestment target. While the Budget had the disinvestment yield to be at Rs 56,500 crore, the government was able to mop up only Rs 46,247 crore.

In 2015-16, the government had realised Rs 23,996 crore from CPSE disinvestment, lower than the Budget target of Rs 69,500 crore. 

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)

PSU Watch