Is divestment only way to bridge fiscal deficit, raise funds?

For the first time the government has met its divestment target ever since divestment exercise began in 1991.

vishwas

Vishwas Dass | February 6, 2018 | New Delhi


#Budget 2018   #CPSEs   #PSU   #Disinvestment   #Arun Jaitley  
(Illustration: Ashish Asthana)
(Illustration: Ashish Asthana)

Even as the government has exceeded the target of raising disinvestment proceeds of Rs 72,500 crore in the current fiscal, the question of enhancing the CPSE’s efficiency largely remains unanswered.

Government’s move of diluting its stakes in some profit making PSUs clearly indicates that it is desperate to meet the disinvestment target and bridge the fiscal deficit.

Once a senior bureaucrat had said, “it is not the business of the government to be in business.” However, by divesting its stakes, the government still seems to be in business and is far from fully privatising the bleeding PSUs. After shouldering the burden of beleaguered Air India for a long time, the centre has now decided to privatise the national carrier—a move which should have happened much before.

The government has garnered Rs 92,475 crore against the set target of Rs 72,500 crore for the current fiscal, registering an increase of Rs 19,975 crore.

Experts say the government has to be firm in privatising a few loss-making PSUs despite the huge opposition of employees and workers’ union by giving them attracting VRS package, more benefits and social security under the new private management.
The centre managed to save its face by selling its 51.11 percent stake in HPCL to ONGC just a couple of days before the Budget which enabled it to exceed the target. Had the government failed to seal the ONGC-HPCL deal of raising Rs 36,915 crore, it would have certainly not met the 2017 FY divestment target.

For the first time the government has met its divestment target ever since divestment exercise began in 1991.

Buoyed by the current fiscal’s performance, finance minister Arun Jaitley, while presenting the Budget, pegged the divestment target at Rs 80,000 crore for 2018-19 FY.

In order to meet this target, the department of investment and public asset management (DIPAM) has to work tirelessly to figure out how more and more stakes of the government in the CPSEs can be sold out.

In 2014-15, the government had raised proceeds of Rs 24,338 crore against the target of Rs 58,425 crore it garnered Rs 32,210 crore against the target of Rs 69,500 crore in 2015-16 and Rs 44,378 crore against the target of Rs 56,500 crore in 2016-17.
 

Comments

 

Other News

How Antyodaya Saral is simplifying everyday life in Haryana

From obtaining an electricity connection to a driver`s licence, ration card, or old-age allowance, delivery of government schemes and services is an aspect of governance that impacts citizens at various points throughout their lives. The Haryana state government provides over 600 such schemes and services.

A blueprint of India’s economic future: From a former RBI governor

From Dependence to Self-Reliance: Mapping India’s Rise as a Global Superpower By Bimal Jalan Rupa Publications, 184 pages, Rs 695 Bimal Jalan, a former governor of the Reserve Bank of India (RBI), has been one of our finest commentators on econom

Carbon neutrality: distant dream or a possible future?

While many countries have been chasing to reach the carbon neutral status, only a few seem to be living up to their pledges as of now. The famous ’Paris Agreement’ of 2015 was glorified and celebrated that finally 196 countries have united with an intent to mitigate and reduce the greenhouse ga

Agnipath: benefits and challenges on the path ahead

The government this week announced the Tour of Duty or `Agnipath` scheme for the recruitment of soldiers in the armed forces. Under this scheme new soldiers will be recruited only for four years. This radical and far-reaching scheme has attracted mixed reactions from various quarters. While some officials

Connecting credit card with UPI: What it means for you

UPI has become an integral part of our daily lives now. We use it to buy groceries, we use it to send money to friends and family, we use it to purchase tickets, book shows, pay the cab driver, and a whole host of other things due to the ease and availability of such a platform at our fingertips. The best

Gandhi’s letters to his youngest son also hold his aspirations for nation

Scorching Love: Letters from Mohandas Karamchand Gandhi to his son, Devadas By Gopalkrishna Gandhi and Tridip Suhrud Oxford University Press, 528 page, Rs 1495 Gandhi’s era happened to be an era when letter-writing was a primary mode of communica

Visionary Talk: Sanjay Pandey, Mumbai Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter