Budget 2017: Divestment Expectation

Budget 2017, which will be presented on February 1, is going to the most crucial budget for the NDA government. Finance Minister Arun Jaitley is likely set a disinvestment target of about Rs 60,000 crore.

The Indian market is trending with positive momentum and the government may not want to lose out this opportunity to garner funds by divesting state-owned entities at good valuations. In the previous budget, the government had set a divestment target of Rs 56,500 crore.

Meanwhile, the divestment target of the government for FY16-17 is likely to be missed. Therefore, the budget mathematics for FY17-18 is critical amidst all the global turmoil, imbroglio over implementation of the GST and the yet unknown impact of the demonetisation drive.

The government has also carried out disinvestment through the exchange traded fund (ETF) route. Such divestment through the ETF route facilitates the government to sell its stakes in various CPSEs through a single offering and avoids the necessity of going to the market repeatedly for divesting different stocks.

In FY17, the government has so far collected about Rs 30,000 crore of revenue through disinvestment, including the offers for sale given in below table.