Rs 12,000-cr target missed

NEW DELHI: Briefing reporters after the meeting of the Cabinet Committee on Disinvestment, Disinvestment Minister Arun Shourie told reporters that the Budget target of raising Rs 12,000 crore this year from disinvestment would not be achieved.
This pessimistic assessment before half the year is out can be attributed to the government’s failure to get big ticket disinvestment going. Strategic sales in PSU oil majors Hindustan Petroleum and Bharat Petroleum had been counted on to generate capital receipts in excess of the budget target. With the CCD deciding to put oil sector share sales in deep freeze for three months, hopes of HPCL/BPCL privatisation taking place this year has receded.
The government has already realised over Rs 3,000 crore this fiscal from disinvestment. Further divestments slated for the current year, such as those of Shipping Corporation of India, Engineers India Ltd, State Trading Corporation, National Aluminium, National Fertiliser and a clutch of small PSUs could generate another Rs 8,000 crore.
The proposed public offering of government equity in Maruti Udyog could generate about Rs 1,000 crore. If all the planned divestments go through, the fiscal target for disinvestment could still be met. The fact that Mr Shourie says that the target would be missed means that he does not expect all non-oil sector divestments to go through either.
With a major item of budget receipts now slated to register a shortfall, the government will have to try harder to meet its fiscal deficit target. A disappointed Mr Shourie made it clear that backtracking on crucial reform such as divestment had its costs and the government would have to bear them.