The numbers under the non-debt capital receipts — more commonly known as disinvestment proceeds — look like an eyesore at the moment when seen in the context of the Budgeted target of Rs 1.05 lakh crore. Given the govt's tight fiscal situation, the fear is that Budget 2020 may crimp spending — the very thing needed at the moment to pull the economy out of the morass.
Many economists have argued for a spending push in the Budget rather than a tax cut. With the fiscal wiggle room shrinking, the attention is now likely to shift towards a more enlarged disinvestment programme.
The NITI Aayog has handed DIPAM a list of non-core assets comprising around 50 CPSEs that the government can monetise. The other option for the govt is to liquidate its stake in bigger PSUs and private companies held through the Specified Undertaking of Unit Trust of India (SUUTI).
The picture will be clear in three days from now. For FM Sitharaman, February 1 could be the proverbial moment to borrow from Margaret Thatcher's playbook and go on a privatisation spree — just like what the former UK Prime Minister did in the 1980s.
Let's take a look at some of the silverware that might figure in the cash-strapped government's sale list.
1. Liquid Assets: Shares in Big PSUs
The government can earn a windfall if it reduces its stake in big PSUs like ONGC, Coal India to 51 per cent. Here's a brief break-up of government's stake in some of the big PSUs in excess of 51%.
Coal India - Rs 21,658 crore
ONGC - Rs 17,369 crore
Power Grid - Rs 4,000 crore
NTPC - Rs 3,509 crore
An ET report had said that the government can sell its entire stake in private sector companies like ITC and Axis Bank held through SUUTI. As on September 30, 2018, SUUTI held around 9.63 per cent stake in Axis Bank, 7.97 per cent in ITC and 1.80 per cent in L&T.
Here's how much it can earn the government:
ITC - Rs 22,867 crore
Axis Bank - Rs 9,594 crore
2. Strategic sale of PSUs
As part of its privatisation drive, the government has already listed some of its family silver for sale. Sale of Air India, BPCL can yield a bonanza for the government. Here's how much the government will earn from the sale of these PSUs:
BPCL: Rs 53,935 crore
Shipping Corporation: Rs 1,786 crore
Power Grid: Rs 19,040 crore
3. Monestise assets through InvITs
The government can take the InvIT route to monetise some of the assets like power lines, gas lines, highways among others. This can help in raising necessary finances during a crunch.
4. Sell enemy property
Sale of enemy property alone can fetch up to Rs one lakh crore. The government has set up a group of ministers to oversee the process of sale of enemy properties numbering 9,406 in total.
5. Loss-making entities
NITI Aayog has made a list of loss-making entities that the government can sell. While it may not make for a windfall, it will at least save the money wasted in capital infusion into these PSUs.
(With inputs from Bureau)
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6 Comments on this Story
Murali Krishna Brahmandam363 days ago
Sitharaman, a JNU graduate, is without doubt a communist at the core - just like AK man and her big bro NaMo . Expect a communist budget that will get out of governance where possible and needed. All said, we are back to the future at May 2004. Let us start all over again.
realdeshbhakt 363 days ago
Thatcherite?don't make us laugh.She destroyed unions and was helped by find of north sea oil.Unless india finds some 100 billion barrels of oil within it's borders,nothing will happen
Murali Krishna Brahmandam363 days ago
Main Features of Budget will be 1) Shift Bollywood to Pakistan - GDP up by 1 percent, 2) Shut down NSE-BSE - GDP up by 2 percent, 3) Send CPI-CPM-Congress parties packing home - GDP up by 1 percent -- That is enough to reach 8-9 percent GDP.