Recently, the Modi Government had set disinvestment as one of its financial agenda. This was announced in the Budget 2021 last year but has since been scaled down. The LIC IPO, which this government is rushing to clear in this last quarter, is going to be key if the government wishes to achieve its disinvestment target.
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- In this Budget of 2021-22, the Indian Finance Minister has targeted Rs. 1.75 lakh crores through disinvestment.
- Currently, this government has scaled down this target to Rs. 78,000 crores.
- Moreover, for the financial year 2022-2023, this disinvestment target has been further scaled down to Rs. 65,000 crores.
- Despite this target being revised for this financial year, achieving it will depend a lot on the LIC IPO. The Life Insurance Corporation of India’s IPO is expected to float in around March.
Presently, the government has sold off Neelachal Ispat Nigam Ltd. and Air India in its privatisation bid.
Moreover, it has brought out a National Monetisation Pipeline. However, the privatisation of State-owned banks is yet to take place. Nirmala Sitharaman said in her Budget 2022 speech that two public sector banks and BPCL were expected in the following year. Hence, the pressure is on the government to successfully pull off the LIC IPO.
Furthermore, the privatisation of banks has been on the burner for a long time, but has faced opposition. Hence, it remains to be seen if the government will once again be able to achieve its divestment target.
Nirmala Sitharaman did not mention the term “privatisation” in her Budget speech this year, although it was a highlight of the previous year’s Budget presentation. Furthermore, the Indian Oppositions have been criticising the government for selling off established companies to the private sector.
Frequently Asked Questions
- In the financial year 2020-21, how much did the present government raise from disinvestment?
This government raised Rs. 37,896 crores from disinvestments.
- How much has the present government raised through disinvestment in the current year 2022?
This government has raised Rs. 12,030 crores up to February 2022 through disinvestment.
- What is the highest figure raised from disinvestment?
The highest amount raised from disinvestment was Rs. 1,00,045 crores back in 2017-2018.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.