The National Monetisation Pipeline is on “good track” to achieve the FY23 target of raising Rs 1.6 lakh crore, Ajay Seth, Secretary to the Department of Economic Affairs, Ministry of Finance, said to a question raised by Moneycontrol on February 4.
He said that the NMP is being executed by different government entities. “The asset monetisation is being done by government entities and the money goes to them, and they use it to invest it further. This amount is not available to finance the budget but the monetisation is very much happening.”
Seth's comments came a day after Finance Minister Nirmala Sitharam said in an interview to Network18 that the government's disinvestment plans were not derailed.
"While my Union Budget 2023-34 speech did not mention divestment and asset monetisation, the budget document has stated the divestment target but did not have updates on the National Monetisation Pipeline (NMP)," Sitharaman said.
The Centre had proposed privatisation of two public sector banks along with one general insurance company in the 2021-22 Budget. It has also unveiled a public sector enterprise policy aimed at reducing the presence of government in running businesses.
The government is working on a path to boost economic growth over the next 25 years, along with the central bank, the finance minister said. India’s economic recovery is firm and on a good foundation, she emphasised.
"Strategic disinvestment has taken place in LIC. So shall we go ahead with the banking sector reform as well. Even on that the Cabinet has given a clearance, we have mentioned it in the Budget. We shall take it forward," she said.
Earlier in May, the Cabinet Committee on Economic Affairs had also given its in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank. LIC (as promoter) and the Centre (as co-promoter), together hold more than 94 percent equity of IDBI Bank (49.24 percent and 45.48 percent, respectively).
The LIC Board passed a resolution to reduce stake in IDBI Bank through divestment, while the government envisages strategic stake sale with intent to relinquish management control.
The Budget proposal for FY24 said that the government had approved a policy of strategic disinvestment of public sector enterprises that will provide a clear roadmap for disinvestment in all non-strategic and strategic sectors. Banking is among the strategic sectors.
“A number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat among others are proposed to be completed in FY 2021-22,” she told the House.
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