Budget 2025: Centre sets Rs 47,000 crore disinvestment target for FY26

The government’s shift in focus is towards value creation.

The Union Budget 2025 has pegged miscellaneous capital receipts, including disinvestment and asset monetisation, at Rs 47,000 crore.

In line with recent practice, the Budget documents, presented in Parliament by finance minister Nirmala Sitharaman on February 1, didn't spell out a specific annual disinvestment target. The government, in FY25, moved away from setting separate yearly disinvestment goals, instead bundling receipts from divestment and asset monetisation under a broader Rs 50,000-crore target for miscellaneous capital receipts.

This shift reflects a less aggressive stance on privatisation as a source of non-debt capital receipts. In FY25, the department of disinvestment and asset management (DIPAM) launched initial public offerings (IPOs) for several key entities including MSTC Limited. It also also used the offer for sale (OFS) route to offload  minor stakes in central public sector enterprises such as HAL, Coal India, RVNL, SJVN Limited and HUDCO, with the offers collectively yielding Rs 13,728 crore.

The Centre’s efforts to complete strategic sales, including privatisation of IDBI Bank, have faced delays. If concluded successfully, the sale of a 60.7 percent stake in IDBI Bank, including 30.48 percent from the government and the rest from promoter LIC, could generate around Rs 28,000 crore. However, no major privatisation deals have been finalised since the sale of Air India to the Tata Group in October 2021.

In July, following the presentation of the full Budget for FY25, then-DIPAM secretary Tuhin Kanta Pandey had highlighted the government’s shift in focus towards “value creation”. The approach entails optimising the performance of public sector enterprises through measures like enhanced capital expenditure, higher dividends, calibrated market dilution, and privatisation where feasible.