In the Union Budget 2015-16 the Finance Minister Arun Jaitley announced a divestment target of Rs 69500 crore, higher than the previous fiscal's target of Rs 58,425 crore. Speaking to CNBC-TV18, Revenue Secretary Shaktikanta Das said the target looks realistic. According to him, the revenue raised by the government via divestment in FY15 has been largest in past many years and there is a scope to better that target.
Das believes the only downside risk to this target may be any international turmoil or poor growth numbers. "We are reasonably confident that they will materialise this year but can't assure for next year," he added.
Adding to the discussion, Oil Secretary Saurabh Chandra said the fuel subsidy figure of Rs 30,000 crore for FY16 is manageable. The computerisation of distribution system will bring leakage in subsidy down, he added. He also said that decision on ONGC divestment will come once upstream contribution data come is received.
Ratan Watal, Secretary, Dept of Expenditure also contributed to the discussion.
Below is the transcript of Shaktikanta Das, Ratan Watal & Saurabh Chandra's interview with Shereen Bhan on CNBC-TV18.
Q: As far as the Budget numbers are concerned and the fiscal math is concerned gross tax revenues are expected to rise above 15.8 percent versus 9.9 percent and most people that we have spoken to seem to suggest that this is a reasonable expectation. On disinvestment; you are budgeting almost Rs 70,000 crore and this is also on account of asset sales that you hope to take forward. The question is given our historical performance and really, it has been abysmal, you can call what you like as far as disinvestment is concerned. Is this a realistic target and if this target is not met then what happens to the government’s fiscal math?
Das: Both the numbers are very realistic. You have talked about the revenue numbers which are very realistic and 15.9 percent growth also includes certain additional resource mobilisation measures that give us certain new revenues. So taking that into accounts a 15.9 or let us say 16 percent growth is very reasonable. However, with regards to disinvestment the Finance Minister has very clearly spelt out that there is an element of strategic disinvestment also. There are cases where strategic disinvestment would mean that the government would slowly move out of the management control.
Today, typically a disinvestment is where government equity remains 51 percent, management is not with us. Strategic disinvestment would mean hugely different. So, it is expected that this year the targets would be more or less met.
Q: As far as the subsidy bill is concerned the share of subsidies has fallen to 1.7 percent in FY16 compared to about 2.1 percent. What is the impact as far as 14th Finance Commission is concerned the center has decide to de-link 8 centrally sponsored schemes (CSS) at this point in time. How much more can we anticipate because the 14th Finance Commission is recommended a much higher number in terms of de-linkage?
Watal: The 14th Finance Commission was talking about devolution of the divisible pool which we all know has gone up by 10 percent and this is untied in the sense that this money goes to the state and which is going to empower the states in significant way. However what we have done is that while this would impact on central assistance to state plans (CASP) because it is part of this devolution. The CSS is going to get affected and there were something called these block grants etc used to be transferred by the planning commission, they are not going to be there. So, we have sort of sequestered most of the schemes within either the central plan which if you see the figures has gone up.
Q: What happens to companies like Oil and Natural Gas Corporation (ONGC) and what happens to the subsidy sharing mechanism? They have sent you SOS after SOS in terms of the need to revamp and review that what should we expect, what should they expect?
Chandra: We are working on burden sharing mechanism and we should come out with something which is acceptable to everybody
Q: If you can take us though the road map as far as liquefied petroleum gas (LPG) is concerned because that has already met with a significant amount of success wherever it has been rolled out and kerosene because that is the big one. As the economic survey pointed out yesterday, only 25 percent actually gets to the beneficiary, more than 40 percent is phantom kerosene as he called it. How soon do we actually see you moving towards Direct Benefit Transfer of LPG (DBTL) as far as kerosene is concerned and the savings on account of it?
Chandra: LPG and kerosene are on different footings. LPG is more or less under our control; the distributors are with us. Therefore what we could do – get about more than eleven and a half crore consumers on the board – was - I would not say easy but with all our efforts we have managed that, this is humongous. The nearest that anybody has got is two crore so, LPG is more or less under control, 80 percent of the consumers are already in.
The challenge is kerosene because the retail distribution is not with us. It requires computerisation of the public distribution system. The ministry of food and civil supplies is already working in it and once that happens then a lot of this cash transfer in kerosene would take place and that should cut down subsidies significantly.
For entire discussion, watch accompanying videos.
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