The government is expected to fix a modest target for receipts from disinvestment in public sector firms for the next fiscal after two attempts for ambitious collections from stake sales were only partially successful.
The finance ministry could in fact peg the target from disinvestment receipts in the range of Rs 25,000 crore to Rs 28,000 crore for 2012-13,a person close to the development said. This would be much lower than the ambitious Rs 40,000 crore that was budgeted from stake sales in public sector firms in 2010-11 as well as 2011-12.
A lot of hopes have been pinned on disinvestment over past two years that have not really materialised. There is a thinking that this target should be kept a bit modest. As and when market conditions allow,government can decide to have more disinvestment issues and the target can be hiked later in the year, the person said adding that the government has a lot more options for conducting stake sales now apart from the initial and follow-on public offers.
PSU buybacks as well as the auction route that was used by ONGC can also be used to garner more revenue, he said. But the final target for receipts from stake sales would be announced on Friday the Budget for 2012-13 is tabled. In 2010-11 the government earned Rs 22,762.96 crore from stake sales in SJVN Ltd,Engineers India Ltd,Coal India Ltd,Power Grid,MOIL and Shipping Corporation of India. It decided to go slow on divestment issues following poor market conditions and a windfall earning of over Rs 1,00,000 crore from auction of 3G spectrum that was more than sufficient to bridge the fiscal deficit.
But in the current fiscal the government postponed plans for stake sales in public sector firms including MMTC,SAIL,RINL,BHEL and Hindustan Copper Ltd. As a result,there have just been two disinvestment issues PFC and ONGC Ltd that garnered a total of Rs 13,912 crore in 2011-12.