Centre nets over Rs 3.78 lakh crore from divestment

Hyderabad: The disinvestment drive undertaken by the BJP government at the Centre has netted an incredible amount of Rs 3,78,383 crore so far, if the statistics released by the Centre are any indication.

Ever since the BJP took over the reins of the Central government in 2014, close to 155 disinvestment /fund transfers took place. However, the total money netted to the exchequer from 1991 to 2014 for disinvestment of Central Public Sector Enterprises (CPSEs) stood at Rs 1,55,303 crore.

These startling statistics were released as part of the Public Enterprise Survey 2020 tabled in Parliament in August 2021. According to the survey, there are currently 366 CPSEs, of which 256 are operational, 96 are under construction and the rest 14 are under closure and/or liquidation. For FY23, the government has set the target of disinvestment of Rs 0.65 lakh crore. In the last Budget, union Finance Minister Nirmala Sitharaman came out with a Strategic Disinvestment Policy 2022 aimed at speeding up disinvestments.

The Central government had announced the privatisation of several CPSEs, including Air India, BPCL, Shipping Corporation of India, Container Corporation of India, BEML, IDBI Bank, Pawan Hans, Neelachal Ispat Nigam Limited; privatisation of two public sector banks and one general insurance company was targeted to be completed in 2021-22. However, the emergence of the Covid-19 pandemic halted the privatisation plan and except for Air India, no privatisation took place in the current fiscal.

In the last five years, the Centre received an average of Rs 1.27 lakh crore per year from dividend and surplus and through disinvestment, realised at an average of Rs 0.59 lakh crore per year. The government expects to generate Rs 1.14 lakh crore from dividends and surplus from CPSEs, RBI, nationalised banks, and financial institutions (excluding revenue from taxes and interest) in FY23.

The government needs to realise that if the substantial shareholding of the government in profit-making CPSEs is disinvested, it will lose dividend/surplus income. Privatisation of profit-making organisations will be a bad move. The government should consider only loss-making units for privatisation and if there are no buyers, they should be closed/liquidated after taking care of the interests of the stakeholders (including staff).

 

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