The government has received Rs 8,625 crore through disinvestment receipts during the financial year 2024-25, with these funds raised through various minority stake sale transactions, MoS Finance Pankaj Chaudhary informed in a written reply to the Lok Sabha.
In response to a query on disinvestment targets over the last five years, the minister said that the government stopped setting specific disinvestment targets beginning in the 2023-24 financial year. For 2024-25, no disinvestment estimate or target has been set.
“So far, the Government has received Rs. 8,625 crore through various minority stake sale disinvestment transactions during the current financial year,” the minister said.
The government typically conducts disinvestment through minority stake sales and strategic disinvestments of Central Public Sector Enterprises (CPSEs).
Strategic disinvestment involves the full or substantial sale of government shareholding in a CPSE along with the transfer of management control. In the case of privatization, the government’s equity and management control in a CPSE are transferred to a private buyer, while in other instances, equity is transferred to another CPSE along with control.
“The policy on strategic disinvestment/privatization is based on the economic principle that Government should discontinue in sectors, where competitive markets have come of age and economic potential of such entities may be better discovered in the hands of strategic investor due to various factors such as infusion of capital, technological upgradation and efficient management practices,” the minister added.
Profitability or loss is, however, not among the relevant criteria for privatization or strategic disinvestment.
Disinvestment is an ongoing process, and execution/completion of specific transactions hinges upon market conditions, domestic and global economic outlook, geopolitical factors, investor interest and administrative feasibility.
The government, since 2016, has given ‘in-principle’ approval for strategic disinvestment of 36 cases of PSEs and/or Subsidiaries/Units/Joint Ventures of PSEs/Bank.
(ANI)
