The government is not optimistic about receiving significant funds from disinvestment because the process of selling IDBI Bank may take longer than anticipated.
According to Finance Ministry officials, the planned sales of IDBI Bank, Shipping Corporation of India and CONCOR are expected to be pick up only in the next fiscal year 2024-25.
A senior government official said there is a slowdown in the disinvestment efforts, and the delay in the sale of IDBI Bank could affect the projected revenue from disinvestment.
The government had hoped to generate around Rs 15,000 crore from the sale of its stake in IDBI Bank.
Apart from IDBI Bank, the government is also facing challenges with selling its stake in CONCOR and Shipping Corporation of India, which will impact the overall disinvestment revenue.
However, while there may not be any major strategic disinvestments, smaller ones are still taking place, the official said, adding the focus will also be on generating revenue through dividends.
Despite the lowered expectations for disinvestment income, the government believes that the fiscal deficit target of 5.9 per cent for the current year will not be exceeded. This confidence is based on the anticipation that surplus funds from non-tax sources will help bridge the gap.
So far, the government has managed to gather disinvestment receipts totalling Rs 10,917 crore, including dividends. In the 2023-24 Union Budget, the government has set a disinvestment goal of Rs 51,000 crore, which is a decrease of nearly 21 per cent from the current year's budget estimate and only Rs 1,000 crore more than the revised estimate. This target is also the lowest in the past seven years.