Government failed to achieve the target of disinvestment! Less hope of adding new companies in the budget

Budget 2023-24: The financial year 2022-23 is about to end, but in this financial year, the target set by the government for disinvestment of government companies has not been met yet and the volatility seen in the market, after that the target will be met. A question mark has arisen. In such a situation, it is believed that on February 1, 2023, Finance Minister Nirmala Sitharaman will present the budget, then the possibility of adding more companies to the privatization list of Central Public Sector Undertakings is negligible.

The Finance Ministry will go ahead with the privatization plan of already announced public sector companies in the next financial year. The budget for the next financial year is expected to reduce the disinvestment target and make it closer to reality, as the current financial year is going to be the fourth consecutive year when the government will fail to meet its disinvestment target.

In the current financial year, the government had set a target of raising Rs 65,000 crore from disinvestment. But till now only Rs 31,106 crore has been raised by selling stake in government companies, of which Rs 21,000 crore has come only from LIC’s IPO. The government had successfully completed the privatization of loss-making Air India in 2021. But during the last year the progress on the privatization front of public sector undertakings has not been good. Experts believe that in view of the general elections to be held in 2024, no major disinvestment announcement is expected in this budget. An official said, the government will go ahead with strategic sales of those companies for which approval has already been obtained from the cabinet.

In 2023-24, the government will pursue the privatization of IDBI Bank along with companies like Shipping Corporation of India, NMDC Steel Limited, BEML, HLL Lifecare, Container Corporation of India and RINL or Vizag Steel. Strategic sale or privatization takes at least a year, making it difficult to achieve the high disinvestment target set in the budget. In the last one year, due to lack of interest from investors, the government had postponed strategic sales of some other companies including BPCL.

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