The government plans to continue the new approach introduced in the interim budget last February by not setting specific targets for disinvestment in the full Budget this July. Instead, disinvestment will be included under capital receipts, as done earlier this year.
“We have changed our disinvestment strategy by not setting specific targets. In the budget, disinvestment and the asset monetisation pipeline will be listed under ‘other capital receipts,'” a government official said.
Since the 1991-92 budget, the term ‘disinvestment’ was mentioned in Union Budget documents, with an initial target of Rs 2,500 crore. This peaked at Rs 2.10 lakh crore in FY21, including the sale of government stakes in public sector companies, banks, and financial institutions.
Also read: Big Tax Breaks Ahead: Budget 2024 to Increase Standard Deduction in New Income Tax Regime!
“We have moved to a value-creating strategy rather than a target-based one,” the official said, emphasizing that it’s a thoughtful approach, not a rushed sale.
The Public Sector Enterprises policy, part of the Aatmanirbhar Bharat initiative from 2020, aims to reduce the government’s role in such enterprises and create new investment opportunities for the private sector. This policy divides sectors into strategic and non-strategic categories.
Strategic sectors include Atomic Energy, Space and Defence, Transport and Telecommunications, Power, Petroleum, Coal, and other minerals, Banking, Insurance, and financial services. In these sectors, the public sector will have only a minimal presence. Remaining companies will be privatised, merged, combined with other companies, or closed. In non-strategic sectors, companies will either be privatised or shut down.
The interim budget listed disinvestment under ‘Miscellaneous Capital Receipts’ without directly mentioning ‘disinvestment.’ Now, it includes “receipts on account of managing equity investments and public assets through various methods.” Previously, ‘disinvestment’ was specifically listed under ‘Miscellaneous Capital Receipts.’
Ongoing transactions, like those involving IDBI and HLL Lifecare, are high priorities for the government, with progress on IDBI disinvestment expected this year.
The Centre has estimated Rs 50,000 crore under miscellaneous capital receipts for the Interim Budget FY25, which is expected to remain the same in the upcoming full budget.