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The government has raised over Rs 4.04 lakh crore through disinvestment and strategic sale of public sector enterprises since the Modi government came into power in 2014, the <keyword id="47209" type="General" weightage="80" keywordseo="finance-ministry" source="Orion">Finance Ministry</keyword> said on Tuesday. Of this, the largest amount totalling over ₹1.07 lakh crore through offer for sale in 59 cases. This was followed by a stake sale through <keyword id="181067" type="General" weightage="80" keywordseo="exchange-traded-fund" source="Orion">Exchange Traded Fund</keyword> (ETF) in 10 tranches, aggregating to ₹98,949 crore. Strategic sales in 10 companies, including <keyword id="2573" type="General" weightage="80" keywordseo="air-india" source="Orion">Air India</keyword>, yielded Rs 69,412 crore to the exchequer in the last 8 years. Share buyback in 45 cases fetched ₹45,104 crore. 17 CPSEs were listed since 2014-15, which yielded Rs 50,386 crore. Of this, the initial pub<keyword id="6367143" type="General" weightage="80" keywordseo="lic" source="Orion">lic</keyword> offering (IPO) of LIC alone fetched the government Rs 20,516 crore. The additional market capitalisation of ₹7.31 lakh crore was achieved through new listings, the ministry said. Besides, the government has sold its residual stake in <keyword id="411504" type="General" weightage="80" keywordseo="paradeep-phosphate-ltd" source="Orion">Paradeep Phosphate Ltd</keyword>, IPCL, and Tata Communication for ₹472 crore, ₹219 crore and ₹8,847 crore, respectively. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/fintech-player-zaggle-files-ipo-papers-with-sebi-to-mobilise-funds-via-ipo/articleshow/96367455.cms">Fintech player Zaggle files IPO papers with Sebi to mobilise funds via IPO</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rbi-to-pause-rate-hikes-in-2023-peak-rate-at-6-25-to-6-5-percent-says-kotak-institutional-equities/articleshow/96371881.cms">RBI to pause rate hikes for most of 2023, hold peak policy rate at 6.25-6.5%: Kotak Institutional Equities</a>

Govt raises over ₹4 lakh crores via disinvestment since 2014

The government has merged the Department of <keyword id="108214" type="CITY" weightage="20" keywordseo="Public-Enterprises">Public Enterprises</keyword> (DPE) with the finance ministry to give it a better control over state-owned firms and facilitate its ambitious privatisation programme. Finance ministry will now have six departments while DPE's hereto parent ministry, the ministry of heavy industries and public enterprises will now be called the ministry of heavy industries. Previously, the <keyword id="44532" type="PERSON" weightage="20" keywordseo="Disinvestment">disinvestment</keyword> ministry - created under the Atal Bihari Vajpayee government - was merged with the Finance Ministry and is now a department under it. Also, <keyword id="62529" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Investment-Promotion-Board">Foreign Investment Promotion Board</keyword> (FIPB) was abolished and administration of foreign investments was given to the Finance Ministry (FinMin). The shift of DPE to the finance ministry will help in efficient monitoring of the capital expenditure, asset monetisation and financial health of the Central Public Sector Enterprises (CPSEs). "<keyword id="156153" type="ORGANIZATION" weightage="20" keywordseo="Ministry-of-Finance">Ministry of Finance</keyword> (<keyword id="11588398" type="UNKNOWN" weightage="20" keywordseo="vitta-mantralaya">Vitta Mantralaya</keyword>), after the sub-heading (v) Department of <keyword id="6354241" type="UNKNOWN" weightage="20" keywordseo="Financial-services">Financial Services</keyword> (Vittiya Sewayen Vibhag), following sub-heading shall be inserted, namely:- (vi) Department of Public Enterprises (Lok Udyam Vibhag)" as per the Cabinet Secretariat notification dated July 6, 2021. The rejig comes ahead of Cabinet expansion slated later in the day. The gazette notification issued said these rules may be called the government of India (Allocation of Business) Three Hundred and Sixty First Amendment Rules, 2021. "They shall come into force at once," the notification said. Presently, the finance ministry has five departments -- Economic Affairs, Revenue, Expenditure, Investment and Public Asset Management and Financial Services. With the addition, this will be the sixth department under the finance ministry. Giving details of the functions performed by the DPE, the notification said coordination of matters of general policy affecting all Public Sector Enterprises (PSEs), evaluation and monitoring the performance of PSEs, including the memorandum of understanding mechanism, review of capital projects and expenditure in CPSEs. Besides, the DPE frames measures aimed at improving performance of CPSEs and other capacity building initiatives of PSEs, rendering advice relating to revival, restructuring or closure of PSEs including the mechanisms, counselling, training and rehabilitation of employees in CPSEs under Voluntary Retirement Scheme and categorisation of CPSEs including conferring 'Ratna' status, among others. The heavy industries ministry will continue to be the administrative ministry related primarily to the capital goods sector. As many as 44 CPSEs including Maruti Udyog Limited, BHEL, Cement Corporation, <keyword id="173465" type="CITY" weightage="20" keywordseo="Scooters-India">Scooters India</keyword>, HMT and various other subsidiaries would be under the Ministry of Heavy Industries. Many companies under the ministry are sick and up for sale under the disinvestment programme of the government. Finance minister Nirmala Sitharaman in her Budget 2021-22 already announced that a revised mechanism for fast-tracking closure of loss making PSUs would be worked out and an incentive package would be developed to incentivise states to sell stake in state PSUs. To monetise lands owned by CPSEs, a special purpose vehicle (SPV) would be developed. She also announced a big-ticket privatisation agenda, including privatisation of two public sector banks and one general insurance company to garner Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions during 2021-22. As part of the divestment strategy for the financial sector, the government has decided to go for a mega initial public offering (IPO) of Life Insurance Corporation of India (LIC) and residual stake sale in IDBI Bank during the financial year beginning April. Besides, strategic sale of Bharat Petroleum Corporation Ltd (BPCL), <keyword id="11588399" type="UNKNOWN" weightage="20" keywordseo="shipping-corp-container-corporation">Shipping Corp, Container Corporation</keyword>, <keyword id="2459265" type="PERSON" weightage="20" keywordseo="Neelachal-Ispat-Nigam-Ltd">Neelachal Ispat Nigam Ltd</keyword>, <keyword id="132488" type="COMPANY" weightage="20" keywordseo="Pawan-Hans">Pawan Hans</keyword>, Air India among others, would be completed in 2021-22. In September 2020, the government had apprised that out of the 34 PSUs approved for disinvestment so far, transactions were completed for eight. Transactions for four PSUs were halted as they are recommended for closure. Two of them were held up due to litigation, while transactions for 20 PSUs are in the process. SEE ALSO- <a href="https://www.businessinsider.in/stock-market/news/clean-science-and-technology-ipo-maximum-broking-house-recommending-this-ipo/articleshow/84193873.cms" data-type="tilCustomLink">Clean Science and Technology, an Indian supplier to Bayer, has opened its IPO ⁠— and ‘subscribe’ is the unanimous call from analysts</a> <a href="https://www.businessinsider.in/stock-market/news/gr-infraprojects-ipo-good-ipo-bet-for-long-term-as-per-analysts/articleshow/84193656.cms" data-type="tilCustomLink">GR Infraprojects IPO is for long term investors, say analysts</a>

Government merges the Department of Public Enterprises with the Finance Ministry to bring better control over state-owned firms

By <keyword id="13186635" type="General" weightage="20" keywordseo="shripal-lakdawala" source="Orion">Shripal Lakdawala</keyword>, <keyword id="13186636" type="General" weightage="20" keywordseo="jatan-shah" source="Orion">Jatan Shah</keyword> and Aashni Shah Even after 6 years of the government providing an ‘in-principle’ approval for strategic disinvestments of 36 of its public sector undertakings (‘PSUs’), the affairs remain in a torpid state. The proposal for such disinvestment was made to ensure reduction of financial burden on the government, elevate the use of technology and thus expand the overall business of the PSUs. However, only 8 out of 36 PSUs have successfully completed their disinvestment procedures and leveraged on the participation of private players. A large chunk of PSUs are still either in the process or haven’t even initiated the process of disinvestment. The ministry of finance, government of India, announced the policy of strategic disinvestment on 1 February 2021 to fulfil the government’s commitment under the Aatmanirbhar Bharat package. Through this policy, the government aims to sell a substantial portion of its stake in the PSUs and use the proceeds to finance various social sector and development programmes. In cases where there is a sale of the entire or even majority of the stake in PSUs, the decision-making power and the control of the companies will shift to a private player. Majority of the PSUs for which strategic disinvestment is proposed are loss making companies i.e., these companies have historically carried forward tax business losses, which are allowed to be carried forward for a period of 8 years under the Income-tax Act, 1961 (‘the Act’). Any potential buyer of these PSUs would want to utilise such losses and set it off against any future income generated by the company. Such losses play a crucial role in determining the value for such loss-making companies. <cmsannotation type="cmsannotation" annotationid="Current scenario" comment="subhead" text="Current scenario">Current scenario</cmsannotation> Currently, section 79 of the Act provides that in case of certain companies, the existing business losses shall lapse on account of a change in shareholding by more than 49%. Accordingly, if the government proposes to sell a stake in PSUs which are not listed or are not held by any listed entity and are not acquired by a listed entity, then in such a scenario, changes in shareholding by more than 49% will lead to a lapse of the existing tax business losses of the PSUs. <cmsannotation type="cmsannotation" annotationid="Proposed amendment" comment="subhead" text="Proposed amendment">Proposed amendment</cmsannotation> In order to facilitate the disinvestment of the PSUs, Budget 2022 proposes to exempt the erstwhile PSUs (i.e., the PSUs in which strategic disinvestment is made by the government), from the provisions of section 79, subject to the condition that the ultimate holding company of the erstwhile PSUs after the completion of strategic disinvestment, continues to hold, directly or indirectly through its subsidiaries, at least 51% of the voting power of such company in aggregate. <cmsannotation type="cmsannotation" annotationid="Is this enough to get the wheels rolling?" comment="subhead" text="Is this enough to get the wheels rolling?">Is this enough to get the wheels rolling?</cmsannotation> In Union Budget 2021, a similar relief was granted for amalgamation of PSUs. Further, clarificatory notification in this regard was issued by the Central Board of Direct Taxes ('CBDT') in September 2021, which is now being formalised by proposing an amendment under the relevant provisions of the act. The previous amendment coupled with the proposed amendment, ensures that there is no lapse on account of carried forward tax losses. While this amendment provides a major relief to the loss-making PSUs which are proposed to be acquired by private sector undertakings, there are a few other requests as well from the industry, to make acquisitions of PSUs lucrative from a tax perspective. Exemption of TDS [tax deducted at source] and TCS [tax collected at source] on such transactions, exemption from obtaining ‘no-objection’ certificates from the tax department, exemption on capital gains on sale of PSUs’ shares and deemed gift taxation on acquisition at a lower valuation, are the few requests from the industry. While there were several expectations from this Budget, only one has been addressed. The proposal in Finance Bill 2022 is a welcome move not only for PSUs which are in the process of disinvestment, but will also speed up upcoming disinvestments. Shripal Lakdawala is Partner, Deloitte India; Jatan Shah is Senior Manager with Deloitte Haskins and Sells LLP; and Aashni Shah is Deputy Manager with Deloitte Haskins and Sells LLP

OPINION: Indian government is still oiling the wheels for disinvestment of PSUs

The much-anticipated IPO of public sector insurer Life Insurance Corp of India (LIC) may well lend more sparkle to the Indian stock markets this Diwali. Speaking to IANS, <keyword id="44532" type="COMPANY" weightage="20" keywordseo="Disinvestment">Disinvestment</keyword> Secretary Tuhin Kanta Pandey noted the fact that LIC is a complex undertaking but the government is up to the challenge and will complete the market offering post October. "It may happen after October... around Diwali," Pandey said in the interview. He added that the government has already initiated its plan to clear all incumbrances on way of LIC IPO. In this regard, he said that the amendment required for the IPO has already been included as part of the Finance Bill, 2021 and will become effective once <keyword id="6354721" type="COMPANY" weightage="20" keywordseo="parliament">Parliament</keyword> gives its nod to the <keyword id="6360189" type="COMPANY" weightage="20" keywordseo="union-budget">Union Budget</keyword>. Presenting the Union Budget on Monday, Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> said that all the announced disinvestment proposals including the LIC IPO would be completed this fiscal. She had first made the mega announcement of the IPO in the last year's budget. On the size of the <keyword id="8843196" type="UNKNOWN" weightage="20" keywordseo="LIC-Offer">LIC offer</keyword>, Pandey said that the amount of shares to be offered in the initial public offering (IPO) would depend on the embedded value and the size. The valuation process is underway for the insurance giant. "This is an institution in which people have trusted and we don't want to break their trust. We have even asked them to be the owners (shareholders)." Pandey said that Amendment Act reserves 10 per cent of the total shares on the block for policy-holders. Regarding the requirement of listed public sector companies to achieve minimum public shareholding of 25 per cent, he said that a new rule is in the making for large PSUs having high valuations. A rule notified in 2018 had mandated every listed PSU, which has public shareholding below 25 per cent, to increase its public shareholding to at least 25 per cent, within a period of two years from the date of that notification -- August 3, 2018. The government has however extended the time period for compliance to the norm till August 2021. Currently, the government totally owns LIC and its valuation is expected to be in the range of Rs 8-10 lakh crore. Once LIC enters the stock market, it may be the largest IPO in Indian history, even if just 5 per cent of its paid-up equity capital is offered to the public. The top five IPOs in India so far are Coal India, Reliance Power, General Insurance Corporation of India (GIC Re), ONGC and SBI Cards and Payment Services. Each of these have been in the vicinity of Rs 10,000 crore. The Secretary for the Department of Investment and Public Asset Management (DIPAM) also said that the government's core focus in terms of disinvestment will be strategic sale and the major chunk of revenue from offer of shares on the stock markets, be it an IPO or offer for sale (OFS) would come from the LIC IPO. SEE ALSO: <a href="https://www.businessinsider.in/business/news/reliance-subsidiary-to-sell-all-of-its-upstream-assets-in-marcellus-shale-play-for-250-million/articleshow/80682497.cms" data-type="tilCustomLink">Reliance subsidiary to sell all of its upstream assets in Marcellus shale play for $250 million</a> <a href="https://www.businessinsider.in/business/corporates/news/kishore-biyani-says-sebi-ban-wont-stop-future-group-deal-with-reliance/articleshow/80680781.cms" data-type="tilCustomLink">Kishore Biyani says SEBI ban won't stop Future Group's deal with Reliance</a>

LIC IPO to launch in October — Government may reserve 10% portion for policyholders

New Delhi, Jan 10 () NMDC Chairman and Managing Director N Brijendra Kumar on Friday said that the Union Cabinet has approved disinvestment of stake of six public sector units (PSUs) in Neelachal Ispat Nigam Ltd, and not that of NMDC. 
 Neelachal Ispat Nigam Ltd (NINL) is a joint venture company, in which four central PSUs -- MMTC, National Mineral Development Corporation (NMDC), Bharat Heavy Electricals Ltd (BHEL) and MECON -- and two Odisha government companies, IPICOL and Odisha Mining Corporation (OMC), are shareholders.
 The government on Wednesday gave in-principle approval for strategic sale of NINL by allowing six PSU shareholders to sell their stake in the steel company.
 "Still confusion is being created by some ppl regarding disinvestment in #NINL,a joint venture company of central and state PSUs in the State of Odhisha.The present decision is not for the disinvestment of @nmdclimited . I repeat No Disinvestment of #NMDC by the present decision," Kumar said in a tweet.
 Some people for their vested interest are spreading rumours on social media and in general public that NMDC is being disinvested which has created an atmosphere of confusion. NMDC is just a stakeholder in NINL, he told .
 Kumar said people must read the government's decision with regard to NINL and understand that the decision is not related to divestment of NMDC.
 MMTC holds 49.78 per cent share in NINL, followed by OMC (20.47 per cent), IPICOL (12 per cent), NMDC (10.10 per cent). MECON and BHEL hold 0.68 per cent stake each in the company. 
 The strategic buyer for NINL will be identified through a two-stage auction procedure, an official statement had said. ABI RVK

'Cabinet approved disinvestment of stake in NINL, not NMDC'

New Delhi, Feb 3 () Finance Minister Nirmala Sitharaman on Monday said the money raised through disinvestment will be used to develop infrastructure, which will have multiplier effect on the economy and not bridging revenue deficit.
The government set an ambitious disinvestment target of Rs 2.10 lakh crore for the next financial year, which includes selling stake in BPCL and insurance behemoth Life Insurance Corporation of India (LIC).
"We are showing clearly where each monies being raised will go. So, it's not being raised to fill certain hole in the Consolidated Fund of India. The money being raised from disinvestment will go towards infrastructure.
"We are showing the direction. We are telling you where the money is going to be spent so that you can plan your investments and your investments and your expansion well in alignment with what government does... you will facilitate the government and we will equally facilitate the private sector," she said while addressing industry chamber Ficci here.
Citing an example, she said import of those medical equipment which are not made in India will come at a duty, but duty collected will be utilised to fund creating medical infrastructure in aspirational districts where there are not good hospitals.
She said when the government puts money infrastructure, it has cascading effect and give rise to economic activity.
On criticism of the government selling family silver through disinvestment, she said the money is not going to bridge revenue deficit but for creating infrastructure which has multiplier effect on the economy.
"...money is not going to as fancy as revenue expenditure but going for creating infrastructure for the country which would probably have lot more multiplier effect in terms of economic activity than to keep an inefficient public sector largely. There are some efficient one also that are put on the block," she said.
Recalling the past experience of government fiscal expansion during the global economic crisis, the Finance Minister said the government has learnt from the past experience and decided not to go on the splurge to boost economy.
"If I have to spend that kind of money, yes we are willing to do but we are clearly saying that we shall not repeat the mistakes of splurging whereas the money spent now with clear intention of asset creation, public asset creation...," she said. JD DP CS BAL

Disinvestment proceeds to be used for creating infra for country: FM

New Delhi, Jul 3 () The government will focus on strategic stake sales to meet the Rs 1.20 lakh crore CPSE disinvestment target in the current fiscal, DIPAM Secretary Tuhin Kanta Pandey said on Friday. The government has already invited bids for strategic sale of national carrier Air India and oil major BPCL. However, their bid deadlines have been extended amid the COVID-19 pandemic. For BPCL, in which the government is selling 52.98 per cent stake, the deadline has been extended till July 31. For 100 per cent stake sale in Air India, the deadline for bid submission is now August 31. Speaking at a webinar on Bharat Bond ETF, Pandey said the Department of Investment and Public Asset Management (DIPAM) has minority stake sales of CPSEs on its table but the emphasis is on strategic disinvestment. "Many of our strategic transactions are going on and moving forward. There was little bit of disruption due to COVID and extensions given in terms of EoI (Expression of Interest) but the government has clarified that we are very much on the same track of aggressively pursuing strategic disinvestment. More focus on that. "Of course, there will be OFS (offer for sale), buybacks...(but) it will be more focused on strategic disinvestment," he said. For the 2020-21 fiscal, the government has set a disinvestment target of Rs 2.10 lakh crore. Of this, Rs 1.20 lakh crore will come from disinvestment of public sector undertakings and another Rs 90,000 crore from stake sales in financial institutions, including life insurance behemoth LIC. The strategic sales being pursued right now include Air India, BEML, Scooters India, Bharat Pumps Compressors, and some units of steel major SAIL, among others. The government had in May announced that a maximum of four public sector companies will be present in strategic sectors, while state-owned firms in other segments will be privatised. This is part of a new coherent Public Sector Enterprises Policy to be formulated to push reforms in Central Public Sector Enterprises (CPSEs). Under the policy, a list of strategic sectors will be notified where there will be at least one, and a maximum of four, public sector enterprises, apart from private sector companies. In other sectors, CPSEs will be privatised depending upon the feasibility. JD AA ABM ABM

Govt to focus on strategic stake sales to meet disinvestment target: DIPAM Secretary

New Delhi, Dec 28 () Bhartiya Mazdoor Sangh, the RSS-affiliate trade union, said it will hold a nationwide protest on Friday against government policies on disinvestment, privatisation and fixed-term employment in the country. 
"We will hold nationwide protest at all district head quarters throughout the country on January 3, 2020 to awaken the government," a BMS statement said on Saturday.
According to the statement, the union will also hold demonstration at Jantar-Mantar in the national capital on Friday.
The union noted that most of the formal jobs in the country have been contractualised or made fixed-term jobs.
The job security has been compromised and workers always run the risk of being thrown out/replaced, it added.
BMS has strongly opposed contractualisation, and casualisation of jobs and demanded that all contract, fixed-term, casual, daily-wage, temporary workers should be regularised as permanent employment, the trade union said.
The union has also demanded that all scheme workers working in Aanganwadi, Aasha, PDS, Midday Meal, NHM etc plans should be conferred the title of government servants.
It also urged the government to stop disinvestment, strategic sale, corporatisation and privatisation of public sector undertakings.
The union contended that the PSUs are the backbone of the Indian industrial structure and the government must stop policy driven disinvestment /privatization of the same.
On foreign direct investment (FDI), the union said that FDI must be
stopped. 
Corporatisation of defence sector is a matter of national security. Privatisation of railways, which is an essential service and lifeline of Indian cities, must be stopped, it added.
BMS lauded government's efforts towards codification of labour laws into 4 codes.
However, it expressed concerns that a number of provisions in the codes are effectively anti-labour and hurt the general interest of workers and has suggested the government to remove those provisions.
The union has also urged the government to ensure effective implementation of labour laws in the country. KKS KKS BAL
BAL

BMS to hold nationwide protest on Jan 3 against disinvestment, fixed term jobs

New Delhi, Jan 17 () Successful disinvestment of Bharat Petroleum, Container Corporation of India and Shipping Corporation will lay the foundation of a much ambitious programme for stake sale in the central public sector undertakings, Former Finance Secretary Subhash Chandra Garg said on Friday.
 From the perspective of non-tax income and receipts, 2019-20 will be an eventful year witnessing some extra-ordinarily positive events and a few misses, Garg said in a blog.
 "Initiation of strategic stake sale in BPCL, CONCOR and SCI was a path-breaking measure and if carried to its logical end, privatisation agenda, stalled for last more than 15 years, would come back on track. 
 "These three transactions would lay foundation for a much more ambitious programme of disinvestment of central public sector undertakings," he said.
 The former finance secretary also noted that if this larger and more ambitious programme of strategic disinvestment can be announced, company by company in the Budget 2020-21, it would send very clear and positive message.
He pointed out that another extremely positive outcome for the government was the receipt of extra-ordinarily large surplus transfer from the RBI.
The government received about Rs 1.5 lakh crore, which was higher than the transfer received in the last three years together. 
 "It is unlikely to continue in 2020-21, but if the RBI does not end up retaining any part of surplus in 2020-21 distribution, the government can expect to get about Rs 90,000 crore. 
 "If RBI retains, it might be about Rs 10,000 crore less," he said. BKS CS MKJ

Successful disinvestment of BPCL, CONCOR to lay foundation for much bigger stake sell programme: Garg

New Delhi, Mar 31 () The government has missed the collection target for the current financial year from CPSE disinvestment set in the Revised Estimates of Budget by about Rs 14,700 crore. In the current financial year 2019-20, the actual disinvestment mop-up has come in at Rs 50,298.64 crore. In the Revised Estimates (RE), the government had estimated the disinvestment proceeds at Rs 65,000 crore, thus a shortfall of around Rs 14,700 crore. In the Budget 2019-20, disinvestment revenue was pegged at Rs 1.05 lakh crore. However, in the RE, the projection was lowered substantially to Rs 65,000 crore. In the current financial year, the government has raised Rs 11,500 crore by way of strategic disinvestment of THDC and NEEPCO to state-owned power utility NTPC. Also, Kamarajar Port was sold for Rs 2,383 crore to Chennai Port Trust. While two follow-on offers of CPSE ETF fetched Rs 26,500 crore, Bharat-22 ETF garnered Rs 4,368 crore. Two initial public offerings (IPOs) -- RVNL and IRCTC -- helped garner Rs 1,113 crore, while RITES offer-for-sale (OFS) fetched Rs 1,130 crore. Buyback of shares by MOIL, MDL and SPMCIL fetched Rs 821 crore to the exchequer, while Rs 600 crore came in by way of remittances from SUUTI. Further, Rs 1,881 crore was procured by way of selling enemy shares. In the financial year 2015-16, the government had realised Rs 23,996.80 crore from CPSE disinvestment, lower than the Budget target of Rs 69,500 crore and RE of Rs 25,312 crore. In the financial year 2016-17, the government had missed the budgeted disinvestment target. While the Budget had pegged target at Rs 56,500 crore, the government was able to mop up Rs 46,247 crore. This was, however, higher than the target set in RE at Rs 45,500 crore. In 2017-18, it bettered the target of Rs 1 lakh crore and raised a record Rs 1,00,056 crore. In 2018-19, the disinvestment mop-up stood at Rs 84,972 crore as against the Budget target of Rs 80,000 crore. In 2019-20, after a gap of 2 years, the government has missed the disinvestment target set in Budget. For 2020-21 fiscal beginning April 1, 2020, the Budget pegged the disinvestment proceeds at Rs 2.10 lakh crore. This includes Rs 1.20 lakh crore from CPSE share sale and Rs 90,000 crore from share sale in public sector banks and financial institutions, including listing of insurance behemoth LIC. JD HRS

FY20 disinvestment mop-up at Rs 50,298 cr, govt misses RE target

<ul><li>The Indian <keyword id="26362" type="ORGANIZATION" weightage="20" keywordseo="Government">government</keyword> is expecting to earn around $1 billion (₹70 billion) from the sale of <keyword id="2573" type="COMPANY" weightage="20" keywordseo="Air-India">Air India</keyword> in the second half of 2019-2020. </li><li>The figure is a far cry from the ₹125 billion valuation Air India was estimated to have in April last year. </li><li>After repeated capital infusions, the government is desperate to cuts it losses. </li></ul>After last year’s debacle when <a href="https://www.businessinsider.in/after-a-botched-sale-the-indian-government-might-just-bail-air-india-out-again/articleshow/65323903.cms">no bids were received for a 76% stake</a> in Air India, the central government is pinning its hopes on a sale of the struggling airline in the second half of the coming financial year, a government official told <a href="https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/govt-eyes-about-1-bn-from-air-india-sale/articleshow/67453691.cms">the Press Trust of India.</a> The Indian government is expecting to earn around $1 billion (₹70 billion) from the sale, a measly sum considering that its land assets alone were valued at around <a href="https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/how-much-is-air-india-really-worth-investment-bankers-weigh-in/articleshow/59506525.cms">₹80 billion</a> a few years ago. While the figure is a far cry from the <a href="https://www.bloombergquint.com/markets/this-is-what-a-buyer-will-have-to-pay-for-air-india">₹125 billion</a> valuation Air India was estimated to have in April last year by the State Bank of India, a government-owned bank, it takes into account a few important realities. Firstly, the government is desperate to cuts its losses and stop the bleeding from the exchequer. It has been making large infusions into Air India to keep it operational on a day-to-day basis, a tough ask given the former’s strained finances. In December 2018, the Indian Parliament approved a ₹23.5 billion investment into the airline, which came on the back of a ₹9.8 billion infusion in August. According to <a href="https://dpe.gov.in/sites/default/files/PE%20ENG%20Volume-1%20FINAL%20web.pdf">the Public Enterprises Survey in 2017-18</a>, the airline lost an average of ₹150 million on a daily basis last year, making it the second-largest loss making public-sector entity. It is expected to lose <a href="https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/eight-reasons-why-the-government-cannot-afford-to-delay-air-india-sale/articleshow/64462356.cms">a further $2 billion</a> by 2020. The airline has debts of over ₹550 billion and a number of repayments are due in the immediate term. When it tried to sell a 76% stake in the airline last year, the government said the buyer would only inherit half of this debt. The government will have to repay or refinance a major portion of the airline’s debts in order to make it attractive to buyers. The finance ministry has even transferred <a href="https://www.livemint.com/Politics/TFQBh5ETTJI4MDjO5eesiP/Air-India-to-be-spared-of-Rs-29000-crore-of-debt.html">₹290 billion </a>worth of debt to a separate holding company. Secondly, the cost-cutting plan is proving harder than expected, evidenced by the airline’s continued <a href="https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/for-second-month-in-a-row-air-india-delays-salaries/articleshow/67425996.cms">inability to pay its employees</a>. Rather than optimising processes and making operations more efficient, the government has focussed on selling off <a href="https://www.livemint.com/Companies/G1qDQsW43xd45Yk4EBkUTI/Govt-eyes-Rs-9000-crore-from-Air-India-assets-sale.html">non-strategic assets</a> like land holdings, buildings and various subsidiaries like its ground handling unit in order to pay down debts. The cost-cutting measures that have been implemented seem largely inconsequential and are indicative of the government’s everything-and-the-kitchen-sink approach. In addition to scrapping non-vegetarian meals for economy passengers, the airline has reportedly been <a href="https://indianexpress.com/article/business/aviation/to-trim-costs-air-india-starts-ferrying-meals-for-its-return-international-flights-5531001/">offering meals stocked in India</a> for its return international flights in a bid to cut catering costs. Thirdly, the outlook for India’s <keyword id="31907" type="COMPANY" weightage="20" keywordseo="Aviation">aviation</keyword> sector is mixed. Despite the unprecedented surge in passenger volumes, a high degree of price competition over airfares and rising <keyword id="59783" type="PERSON" weightage="20" keywordseo="Jet-fuel">jet fuel</keyword> costs have made it hard to turn a profit, even for Indigo, the country’s <a href="https://www.businessinsider.in/indias-largest-passenger-airline-just-posted-its-first-ever-quarterly-loss-since-going-public-and-its-results-reflect-the-larger-woes-of-the-countrys-aviation-sector/articleshow/66362156.cms">most cost-effective airline.</a> A rebound in oil prices in 2019, along with <a href="https://www.livemint.com/Companies/saWxbKYAqB2WXFukZ8E2EN/Airports-need-45-billion-investment-to-improve-capacity-by.html">saturated airport capacity</a>, will drive costs further up. To make matters worse, Air India holds <a href="https://www.thehindubusinessline.com/economy/logistics/air-india-jet-airways-see-dip-in-domestic-market-share/article25865557.ece">less than 13%</a> of this market, having been muscled out by its private competitors. Clawing back its market share won’t be easy, especially given the fact that it won’t be able to increase its fleet as quickly as its rivals. SEE ALSO: <a href="https://www.businessinsider.in/after-a-botched-sale-the-indian-government-might-just-bail-air-india-out-again/articleshow/65323903.cms">After a botched sale, the Indian government might just bail Air India out again</a> <a href="https://www.businessinsider.in/indias-largest-passenger-airline-just-posted-its-first-ever-quarterly-loss-since-going-public-and-its-results-reflect-the-larger-woes-of-the-countrys-aviation-sector/articleshow/66362156.cms">India’s largest passenger airline just posted its first ever quarterly loss since going public — and its results reflect the larger woes of the country’s aviation sector</a>

The Indian government is planning to sell its struggling national carrier for $1 billion next year — a much lower price than it had initially hoped for

You Searched For "Disinvestment of Public Sector" and got 11 results

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