Finance minister Nirmala Sitharaman on February 1 increased the disinvestment target to Rs 1,05,000 crore for the financial year 2019-20, up 16 percent year-on-year from last year’s revised collections.
As on March, the center had exceeded its disinvestment target for the fiscal year 2018-19. Against a target of Rs 80,000 crore for disinvestment, the receipts touched Rs 85,000 crore.
The government had also exceeded the disinvestment target of Rs 1 lakh crore in 2017-18, mainly on the back of multiple deals like an agreement with ONGC for the strategic sale of its 51.11 percent equity share-holding in HPCL at a consideration of Rs 36,915 crore.
The budgeted estimate for 2017-18 was Rs 72,500 crore, comprising sale of equity in state-owned companies, including strategic sale and was later revised and increased to Rs 1 lakh crore.
For 2018-19, DIPAM got a sizeable amount from its marquee Exchange Traded Funds — CPSE and Bharat 22. While Rs 18,729.85 crore has been garnered from two fund offerings of the Bharat 22 ETF in the last fiscal, Rs 26,500 crore has come in from the CPSE ETF.
In March, the government got Rs 1,000 crore from the strategic sale of Dredging Corp to a consortium of four ports and Rs 2,000 crore from the sale of enemy shares. The government has also completed two initial public offerings of Mazagon Docks and MSTC.
Proceeds from DIPAM comprise a significant part of non-tax revenue for the Centre. A higher receipt from disinvestment is crucial as there is uncertainty regarding in meeting the indirect tax collection target, mainly from Goods and Services Tax (GST).
Robust revenue collection enables government stick to its fiscal deficit target.
According to Union Budget 2019 medium term fiscal policy statement, disinvestment receipts in 2020-21 and 2021-22 will be Rs 80,000 crore in each year.