Govt revamping its disinvestment process to meet the fiscal target in 2016-17

With an aim to meet the targets in 2016-17, the government is revamping the disinvestment process, when a tighter budget is expected to leave little room for missing revenues as the Centre has done in the current fiscal. In order to broaden the decision-making process and quickly identify companies for sale, the disinvestment department has roped in the Department of Economic Affairs from the finance ministry and the Department of Public Enterprises who is the nodal agency for all central public sector enterprises. The new disinvestment policy will not be in isolation and only from the view of selling small stake in already listed firms. The government is looking to bring more firms so that they have a ready pipeline.

Besides, the government plans to push profitable subsidiaries of central public sector enterprises to list on the bourses. The government is already pushing firms such as Nalco and Coal India to go for buybacks. The other companies that the government may seek to persuade in this manner include Bharat Heavy Electricals and mining firm NMDC. In this fiscal, the government had kick-started the disinvestment process early with a 5% stake sale in Rural Electrification Corporation in April, followed possible to meet fiscal targets while meeting Seventh Pay Commission obligations

Earlier, Finance Minister Arun Jaitley has said that during the financial year 2016-17, the central government has to make provision for about Rs 1.10 lakh crore in order to meet the liabilities on account of implementation of Seventh Pay Commission recommendations and One Rank One Pension Scheme. The government is committed to keep the fiscal deficit at 3.5% of the gross domestic production in 2016-17.

Since the beginning of the current fiscal, the government has raised about Rs 13,300 crore from divestment against the target of Rs 69,500 crore, of which Rs 28,500 crore was to come through strategic sale.