The Union government is committed to privatisation and will move forward with disinvestment and asset monetisation plans, especially where cabinet approvals are in place, Finance Minister Nirmala Sitharaman said in an exclusive interview with Network18 Group Editor Rahul Joshi.
When asked the reason why disinvestment and asset monetisation were omitted from the budget, Sitharaman said: “Disinvestment and asset monetisation is still a part of the budget. It may not be a part of my speech…We have to see when is the best time to monetise assets,” she said.
In a deviation from earlier practice, the Budget speech for 2023-24 did not separately mention how much the government plans to raise from disinvestment or privatisation of state-owned companies. The minister also did not mention the government’s ambitious plan to monetise fully completed and operational infrastructure to raise funds for financing future projects, National Monetisation Pipeline (NMP), in the Union Budget for 2023-24.
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The privatisation of banks would require legislative changes, Sitharaman added.
The government has set a target to raise Rs 51,000 crore from disinvestment in FY24, according to budget documents released by the Ministry of Finance. In FY23, the government had budgeted to raise Rs 65,000 crore through divestments. The revised estimate for disinvestments in FY23 stood at Rs 50,000 crore. The move is on expected lines on the back of unfavourable market conditions and a sluggish privatisation drive in 2022.
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NMP target for FY23 is set at Rs 1.6 lakh crore during the current fiscal. Prime Minister Narendra Modi has referred to NMP as key to ‘monetise and modernize’. The plan was aimed at monetising operational assets by luring private sector investment in these projects once the execution risk of projects is reduced. The funds thus raised would be pumped back into infrastructure and other key projects.