Government achieves only 16% of 2023-24 disinvestment target so far

Global geopolitical tensions seem to have created challenges for the government with regard to its FY23-24 disinvestment plans. Current data reveals just ₹8,000 crore has been collected so far, which is only 16% of the aimed ₹51,000 crore for the fiscal year.

One significant setback is the delayed sale of a 60.72% stake in IDBI Bank. The global scenario and specific compliance issues, including adherence to the Reserve Bank of India's ‘fit and proper’ criteria, have contributed to this delay.

Sources revealed to Business Today that the ‘fit and proper’ vetting process, initiated by the RBI in April, has extended beyond the usual timeframe due to the unique nature of this transaction. Initial bids from Kotak Mahindra Bank, CSB Bank from Canada, and Emirates NBD to acquire a majority stake in IDBI Bank were affected by these delays.

Apart from IDBI Bank, the government faces challenges in divesting its stakes in CONCOR and the Shipping Corporation of India, impacting overall disinvestment revenue. Financial bids for a majority stake in NMDC Steel (NSL) have been postponed until 2024, despite expectations of a minimum ₹11,000 crore revenue.

However, the government has collected ₹26,645 crore in total disinvestment receipts, including ₹18,645 crore from dividends. The government remains hopeful, anticipating that robust bank dividends and contributions from the Reserve Bank of India will offset disinvestment shortfalls, providing some relief amid these challenges.

Also Watch: Government proposes to sell upto 7% stake in HUDCO via OFS, raising ₹1100 Crore