The central government aims to raise Rs 65,000 crore through divestments in 2022-23, according to Finance Minister Nirmala Sitharaman's budget speech.
In FY22, the government had budgeted to raise Rs 1.75 lakh crore through divestments but fell short. It has now revised its estimate for FY22 for Rs 78,000 crore.
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Asset sales by the Indian government continue to be seen as key to bridging the government's budget gap. However, the government has fallen short of targets.
In October, the government sold the national carrier Air India to the Tata Group for an enterprise value of Rs 18,000 crore. However, only about 15% of that, or Rs 2,700 crore, will go to the government. The rest will be used to repay the carrier's debt.
The government has raised Rs 9,329 crore through sale of stake in seven central public sector enterprises as of December, according to the latest data available on the Department of Investment and Public Asset Management's portal.
Work on an initial public offering of the country's largest insurer Life Insurance Corp. is still underway.
The government can divest around Rs 5 lakh crore if it sells its entire holding in non-strategic central PSUs where it holds more than 51%, said a report by Kotak Institutional Equities released ahead of the budget. It can raise Rs 1.7 lakh crore if it reduces its stake to 51% in these companies.
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