Budget 2016: Jaitley expects to raise Rs 36,000 cr via divestment in FY17

After missing the divestment target for six consecutive years, finance minister Arun Jaitley has lowered the divestment target for FY17 to Rs 36,000 crore. He expects to garner Rs 20,500 crore through strategic stake sale in FY17.A new policy for management of government investment in PSUs, including disinvestment and strategic sale, has been approved. "We have to leverage the assets of CPSEs for generation of resources for investment in new projects. We will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their asset value for making investment in new projects. The NITI Aayog will identify the CPSEs for strategic sale," Jaitley said.Jaitley had expected to rake in Rs 69500 crore through divestment in public sector units (PSUs) in FY16, against which the government has managed to raise just over Rs 13,300 crore so far this fiscal by selling stake in five PSUs, excluding the NTPC stake sale that happened last week.

The government is on the cusp of missing its disinvestment target for the 16th time in 25 years.

Falling commodity prices and volatile equity markets globally played spoilsport and the government had to continuously defer its stake sale plans.

Last week, the government sold five percent stake in NTPC and majority of the shares were bought by the Life Insurance Corporation of India (LIC). FIIs and institutional buyers put in bids for Rs 7,287 crore, as against a total issue size of Rs 5,030 crore.