Minister of State for Finance Anurag Singh Thakur said on Tuesday that the space for selling minority interests in public sector firms has shrunk, and strategic disinvestment will be the primary mode of disinvestment receipts going ahead.
Thakur said in a written reply to the Rajya Sabha that the government has received Rs 20,627 crore in disinvestment receipts as of March 3, which really is around 64% of the Updated Projection for 2020-21. Market sentiment, consumer appetite, and market value of such securities all play a role in the government’s equity disinvestment in central public sector enterprises.
“The size of minority stake sales has declined over the years, and systemic disinvestment and privatization would be the main source of disinvestment,” Thakur stated.
The updated disinvestment receipts for the current fiscal year, which ends in March, are slightly lower than the Budget projections of Rs 2.10 lakh crore. On Tuesday, Thakur said that the unfavorable market conditions resulting from Covid-19 had adversely affected the government’s disinvestment proposals.
The updated disinvestment collections for the current fiscal year, which ends in March, are slightly lower than the Budget projections of Rs 2.10 lakh crore. On Tuesday, Thakur said that the unfavorable market conditions resulting from Covid-19 had adversely affected the government’s disinvestment proposals.
“The Covid-19 pandemic, combined with the post-lockdown downturn in manufacturing and services, as well as finance industry volatility, presented major challenges for the administration’s disinvestment plans, delaying transactions both for minority stake selling and structural disinvestment for a substantial portion of FY 2020-21,” Thakur said.
He also mentioned that with the ensuing rebound of the stock market, disinvestment sales are returning to normal.
Rashtriya Ispat Nigam Ltd., Neelachal Ispat Nigam Ltd., NMDC’s Nagarnar unit, Ferro Scrap Nigam Ltd., and SAIL units Alloy Steel Plant, Durgapur; Visvesvaraya Iron and Steel Plant, and Salem Steel Plant have all been designated for tactical disinvestment by the government.