Two For Two

For the second year in a row the Narendra Modi government met its disinvestment target. Days before the end of 2018/19, the Power Finance Corporation (PFC), a public sector enterprise, bailed out the government by acquiring 52.63 per cent shares in Rural Electrification Corporation (REC), yet another state-owned power infrastructure finance company, for Rs 14,500 crore.

The total value of disinvestment proceeds for the whole year has touched Rs 83,523.14 crore - much more than the Rs 80,000 budgetary target.

It will definitely help the government stick to its fiscal commitments; and perhaps is the only motive driving the government's now familiar pattern of meeting disinvestment targets through a mix of initial public offers, buyback of government shares by PSEs, exchange-traded-funds, and the sale of stake the government holds through the mutual fund Specified Undertaking of Unit Trust of India or SUUTI.

This amounts to strategic management of its assets to generate funds, rather than disinvestment, in its strictest sense. - Joe C Mathew