{"id":183647,"date":"2022-05-10T20:39:37","date_gmt":"2022-05-10T15:09:37","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=183647"},"modified":"2022-05-10T20:39:37","modified_gmt":"2022-05-10T15:09:37","slug":"the-reasons-behind-the-slow-disinvestment-pace","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-reasons-behind-the-slow-disinvestment-pace\/","title":{"rendered":"The reasons behind the slow disinvestment pace"},"content":{"rendered":"\n

Context<\/strong>: The government aims to earn \u20b9<\/span>65,000 crore through the sale of its stakes in various central public sector enterprises (CPSEs) in FY23. However, privatization is still on the slow track.<\/p>\n

What is the Centre\u2019s disinvestment plan?<\/strong><\/h5>\n

Under its Public Sector Enterprise (PSE) policy, the government plans t:<\/p>\n

–<\/strong> open all public sector units (PSUs) for private investment,<\/p>\n

–<\/strong> fully exit sectors it considers non-strategic, and<\/p>\n

–<\/strong> keep at least one PSU in sectors it considers strategic.<\/p>\n

The government also sells equity through initial public offerings (IPOs), follow-on public offerings (FPOs), or offer for sale of listed entities.<\/strong><\/p>\n

What is responsible for these delays?<\/strong><\/h5>\n

The covid-19 pandemic posed several hurdles to the government\u2019s disinvestment plans<\/strong>. Strategic sales stalled over FY21 and FY22 when India saw three waves of the pandemic, largely because potential investors were unable to physically inspect the assets, conduct due diligence and submit bids.<\/p>\n

Disinvestment has also faced opposition from employees<\/strong> fearful of job losses.<\/p>\n

Several state governments have opposed privatization<\/strong> as well.<\/p>\n

How important is disinvestment?<\/strong><\/h5>\n

Disinvestment is a strategy for the government to reduce its fiscal burden<\/strong> and raise money to meet the needs of investments towards creating value for the public, which can be in the form of creating infrastructure or towards welfare schemes<\/strong>.<\/p>\n

Disinvestment is also seen as a way to unlock the value of under-performing assets<\/strong>.<\/p>\n

Thus, through the privatization of some PSEs, the Centre can seek private sector investments<\/strong> to turn around loss-making or under-performing units.\u200aThis, in turn, helps in\u200acreating further\u200aemployment creation<\/strong>.<\/p>\n

Has the Govt met its disinvestment targets?<\/strong><\/h5>\n

The government has rarely met targets set for disinvestment over the past several years, putting pressure on the government\u2019s plans to balance out the fiscal deficit.<\/p>\n

For the pandemic-hit fiscal years\u2014FY21 and FY22\u2014the government fell far behind achieving its targets with \u20b9<\/span>32,845 crore achieved in FY21 against target of \u20b9<\/span>2.1 trillion, and \u20b9<\/span>13,530 crore achieved against a target of \u20b9<\/span>1.75 trillion, which was later revised downwards to \u20b9<\/span>78,000 crore.<\/p>\n

For FY23, it has rationalized the disinvestment target to \u20b9<\/span>65,000 crore.<\/p>\n

Source<\/strong>: This post is based on the article \u201cThe reasons behind the slow disinvestment pace<\/strong>\u201d published in Livemint<\/strong> on 10th May 22<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Context: The government aims to earn \u20b965,000 crore through the sale of its stakes in various central public sector enterprises (CPSEs) in FY23. However, privatization is still on the slow track. What is the Centre\u2019s disinvestment plan? Under its Public Sector Enterprise (PSE) policy, the government plans t: – open all public sector units (PSUs)… Continue reading The reasons behind the slow disinvestment pace<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10501],"class_list":["post-183647","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":4,"cached_at":"","cached_date":1698458985},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/183647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=183647"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/183647\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=183647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=183647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=183647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}