Disinvestment policy gets a facelift in the new budget

Indications from the budget are that the government goes aggressive on the disinvestment policy front. Most important one is the revival of the strategic sale route. The budget has separately mentioned a target of Rs 20500 for strategic sale.

Under strategic sale, government will shed its management and control in PSEs to a strategic private sector investor by selling majority stake.

Strategic sale is a full scale privatization measures whereas the normal disinvestment implies government keeping majority shares in the PSE.

The strategic sale CPSEs will be selected by the NITI Ayog .

On the usual type of disinvestment – the sale of fractional shares; the set target is Rs 36000. Together these two, the budget aims to procure Rs 56500 which is mentioned under other receipts of the capital receipts.  

Still, the budget’s disinvestment target is more than double that of the current year’s realized level. As per the revised estimate, the government got only Rs 25313 crore during 2015-16.

An interesting turn of the disinvestment programme is that General Insurance companies will be put on disinvestment stall. Another candidate is the public sector new generation bank – IDBI. Finance Minister clarified that government will shed majority ownership in IDBI.

Name of the Department of disinvestment will be changed to Department of Investment and Public Asset Management.