Disinvestment proceeds of Rs 4.07 trn realised in last 9 years: Eco Survey

About Rs 4.07 trillion has been realised as disinvestment proceeds in the past nine years, and post-2014 the government is engaging with the private sector as a co-partner in the development, the Economic Survey said on Tuesday.

In the current fiscal, out of the budgeted amount of Rs 65,000 crore, 48 per cent or over Rs 31,000 crore has been collected as of January 18, 2023.

The survey said privatisation of Air India re-ignited the privatisation drive, and evidence shows that labour productivity and the overall efficiency of the PSUs disinvested during 1990-2015 has improved.

"During FY15 to FY23 (as of 18 January 2023), an amount of about Rs 4.07 trillion has been realised as proceeds from disinvestment through 154 transactions using various modes/instruments," said the Survey tabled in Parliament by Finance Minister Nirmala Sitharaman.

Of this, Rs 3.02 trillion was realised from minority stake sale and Rs 69,412 crore was realised from strategic disinvestment transactions in 10 CPSEs - HPCL, REC, DCIL, HSCC, NPCC, NEEPCO, THDC, Kamrajar Port, Air India and NINL).

The government is currently working on privatising a host of CPSEs like Shipping Corporation of India, NMDC Steel Ltd, BEML, HLL Lifecare, Container Corporation of India and Vizag Steel, besides IDBI Bank. These strategic sale processes are in various stages and a majority of them are expected to be completed in the next fiscal, beginning April 1.

"A fundamental principle behind the government's policy in the post- 2014 period has been the engagement with the private sector as a partner in the development process. The government's disinvestment policy has been revived in the last eight years with stake sales and the successful listing of PSEs on the stock market," it said.

The pandemic-induced uncertainty, the geopolitical conflict, and the associated risks have posed challenges before the plans and prospects of the government's disinvestment transactions over the last three years.

Nevertheless, the government has reaffirmed its commitment towards privatisation and strategic disinvestment of Public Sector Enterprises by implementing the new Public Sector Enterprise (PSE) Policy and Asset Monetisation Strategy.

The Survey said that determined efforts should be taken to make the public sector asset monetisation scheme successful in realising wide-ranging efficiency gains.

"If asset monetisation revenues are used to reduce public sector debt, the sovereign credit rating will improve, leading to a lower cost of capital. That will be the biggest fiscal stimulus to the economy," the Survey said.

The 2021-22 Budget had identified monetisation of operating public infrastructure assets as a key means for sustainable infrastructure financing.

Following that, in August 2021, the government listed projects worth Rs 6 trillion under the National Monetisation Pipeline (NMP) that will be looked at to unlock value in infrastructure assets across sectors ranging from power to road and railways by fiscal 2024-25.

Also in the 2021-22 Budget, the government announced the PSE policy as per which all PSUs will be privatised, barring those in four strategic sectors -- Atomic energy, Space and Defence; Transport and Telecommunications; Power, Petroleum, Coal and other minerals; and Banking, Insurance and financial services.

In these strategic sectors, the government will retain only a bare minimum number of PSUs.