The disinvestment target will be missed for the fifth year in a row

Companies will not be privatized before elections

NEW DELHI: India is unlikely to be able to raise half of its target revenue from the planned sale of state-owned companies in the current fiscal year. According to a news agency report, the country will miss the disinvestment target for the fifth year in a row. The main reason behind this is that elections change the priorities of the government.

It is worth mentioning that Lok Sabha elections are going to be held in the country in 2024. It's only a few months away. Meanwhile, two government sources said the government has set its disinvestment target for 2023-24 at Rs. 30,000 crore ($3.60 billion) could be missed. For the current financial year ending March 2024, India has disinvested Rs. 51,000 crore was targeted. In FY23-24, sale of stake in IDBI Bank and privatization of state-owned NMDC Steel raised Rs. 51,000 crore target, about Rs. 30,000 crore was expected to be collected. However, the delay in vetting interested buyers for the game by the Reserve Bank has pushed the sale timeline further.

The sale of NMDC Steel will not be completed this year due to state assembly elections and Lok Sabha elections next summer. The company's main plant is in the mineral-rich state of Chhattisgarh, and unions here have opposed the sale.

While India may still achieve some small disinvestments in the current fiscal year, it will still be less than half of its total target.

Since 2019, the government has been unable to implement plans to sell off companies in several sectors including steel, fertilizers and oil and gas due to issues such as land and union opposition.

According to government data, the government has received Rs 8,000 crore from stake sales so far this year. Some of the shortfall in the current year's target will be offset by higher dividends paid by state-owned companies to the government. State-owned companies are paying higher dividends due to strong profits and stable demand. The government will spend its Rs. 43,000 crore is expected to exceed the dividend target and so far from government companies Rs. 20,300 crores have been obtained.

The delay in privatization will not affect the government's fiscal deficit target of 5.9% of gross domestic product (GDP).

Despite Indian markets hitting record highs this year, the government has been successful only through so-called offers through stock exchanges to sell minority stakes in five of its companies.