'Centre confident of crossing divestment target this year too'
Mumbai: The government is confident of exceeding the divestment target for the fourth consecutive year, a senior finance ministry official said on Thursday, affirming that privatisation efforts will also be speeded up.
Strategic sale involving a sale of the flag carrier Air India is also "doable" this fiscal year, and there can be one more strategic sale for which the ministry is awaiting the Cabinet nod, the official said.
The budget has set a divestment target of Rs 1.05 lakh crore for the current fiscal, up from Rs 90,000 crore last fiscal that it had overshot.
In the past, the government has been using multiple methods to meet its divestment numbers. For instance, in share sale through the exchanges, it has been forcing LIC to snap up IPO/OFS equities, while in strategic sale, last year it forced ONGC to take over HPCL. Again, after its attempts to get an investor for the crippled IDBI Bank, it had asked LIC to take over the bank last fiscal
The government has also been using exchange traded fund (ETFs) route to mop up resources. Last fiscal again, it sold a small portion of its holding in the Suuti (ITC, L&T and Axis Bank) stocks through this method.
According to experts, divestments hold the key to resource mobilisation for a cash-starved government, especially after last week it massively reduced corporate taxes, drilling a Rs 1.45-lakh-crore hole into the budget numbers presented in July.
"We have a very well laid-out strategy for achieving the divestment target this year also. Last three years we exceeded the target and there is no reason why we will not exceed the target this year as well," Dheeraj Bhatnagar, the additional secretary in the department of investment and public asset management, said addressing the annual Capam conference here. He said there are 11 state-run companies which are in the process of going public and the government has drawn up other plans as well on the same.
On Air India, he said the government has taken care of a lot of apprehensions of prospective investors after the earlier unsuccessful bids to sell the company, and is now willing to sell beyond 74 percent as well.
Bidding for the national carrier will be carried out through a newly developed e-bidding system, he added. The bureaucrat said the presence of home minister Amit Shah, who has a name for execution, as the head of the group of ministers, will also help.
Meanwhile, Bhatnagar also said the government is considering realising its "dream" of corporatising the national airports operator Airports Authority shortly and also the ports.
The government is also looking at selling its minority stake in Axis Bank, ITC and L&T held through the Specified Undertaking of Unit Trust of India (Suuti), he said, without disclosing a timeline. It is also looking at selling its minority stake in Vedanta and Hindustan Zinc, subject to necessary clearances from the Supreme Court which is adjudicating a matter on the same at present, he said.
