Budget 2023: India Lowers Divestment Target For FY24 To Rs 51,000 Crore

The central government aims to raise Rs 51,000 crore through divestments in 2023–24, according to budget documents from the Ministry of Finance.

In FY23, the government had budgeted to raise Rs 65,000 crore through divestments but fell short. The revised estimate for disinvestments in FY23 stood at Rs 50,000 crore.

Divestment revenues continue to be weaker than estimated, Rahul Bajoria, chief economist at Barclays, said in a research note pre-budget. In FY24, the divestment of IDBI Bank is likely to be completed, but the privatisation of Bharat Petroleum Corp. seems unlikely, he said.

Many deals, including those involving IDBI Bank Ltd., Container Corp. of India Ltd., BEML Ltd., Shipping Corp. of India, NMDC Steel Ltd., HLL Lifecare Ltd., and Projects & Development India Ltd., among others, are expected to carry forward to FY24, according to Tanvee Gupta Jain, an economist at UBS.

Sudipto Mundle, chairman at the Center for Development Studies and member of the Fourteenth Finance Commission, said divestments have to be market-sensitive and depend on timing. "You shouldn't throw away your family jewels at throwaway prices simply because you've set a target, and maybe the targets should be set more realistically and modestly," he said.