Modi government misses disinvestment target; earned Rs 16,500 crore in FY2023-24: Report
The Narendra Modi government's ambitious privatization agenda faced setbacks in the fiscal year 2023-2024, with the government only managing to raise Rs 16,500 crore through stake sales in state-run enterprises, missing its internal target of Rs 18,000 crore by approximately 9 percent.
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FollowThe Narendra Modi government garnered Rs 16,500 crore ($1.98 billion) in the fiscal year 2023-2024 through the sale of its stakes in approximately 10 state-owned enterprises, a figure approximately 9 per cent below the anticipated Rs 18,000 crore internal target, as reported by Reuters citing official data.Â
Prime Minister Narendra Modi's initiative to privatize state-owned entities has been momentarily stalled due to the onset of general elections scheduled to commence on April 19. It's noteworthy that the government had adjusted its disinvestment objectives for the fiscal year 2023-2024 to Rs 30,000 crore, as opposed to the earlier goal of Rs 51,000 crore for the ongoing fiscal period.
The administration's disinvestment agenda, particularly concerning strategic divestment, has consistently fallen short of its targets since the fiscal year 2020 budget. Although Modi's government has achieved its privatization and minority stake sale targets only twice in the past decade, its performance surpasses that of preceding administrations.
The absence of a set target for the current fiscal year, commencing on April 1, represents a departure from standard practice. However, the deficit in stake sale proceeds has been partially offset by increased dividends from state-owned enterprises, with dividends amounting to approximately Rs 63,000 crore in 2023-2024, exceeding the Rs 50,000 crore target, according to government data.
During the 2023-2024 fiscal year, the government successfully executed offer-for-sale transactions in Coal India, Rail Vikas Nigam (RVNL), SJVN, and IRCON International Ltd. Additionally, it launched an Initial Public Offering (IPO) of the Indian Renewable Energy Development Agency (IREDA), incorporating both fresh share sales and OFS by the central government. Furthermore, another OFS of NHPC has already been announced.
The Modi Government 2.0 has established a disinvestment target of Rs 50,000 crore for the financial year 2024-2025, as indicated by the finance bill presented. Notably, the Finance Minister refrained from mentioning disinvestment targets in her sixth budget speech.
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