Union Budget 2019 has set in motion a series disinvestments that the Centre is preparing for. According to a report by Indian Express, the government has prepared a “substantial inventory” of land assets that can be monetised, and the process of such sales will be finalised very soon.
The government has bet on disinvestment and land asset monetisation to raise over Rs 1 lakh crore this year. A virtuous cycle for sell-off and land asset sale can be set in motion if there is strong political will. This can help raise significant resources, especially when the economy is slowing and tax revenues are a concern.
The Centre is also keen on strategic sales, and three fresh expressions of interest will be announced next week, Department of Investment Public Assets Management Secretary Atanu Chakraborty told The Indian Express.
Chakraborty said many measures in the Budget, like raising the limit of public shareholding in listed companies, will help in attracting fund flows to the equities market.
The government has a list of 29 companies that will be put up for strategic sales to private companies. Chakraborty said the government will put out certain land assets to test the market response and then scale up the process.
The Union Budget 2019 has set a high target of Rs 1.05 lakh crore from disinvestment for the current fiscal year, compared with Rs 90,000 crore in the Interim Budget. Apart from residual stake sales, buybacks and strategic sales, land monetisation will be a key component of the Centre’s push to raise resources.
The government has raised Rs 2,357.10 crore in the first two months of 2019-20. In 2018-19, the government raised Rs 84,972.16 crore against the budgeted target of Rs 80,000 crore. The initial reaction of the stock markets to the Budget notwithstanding, Chakraborty said the government has announced several measures that will attract equity flows into the market.
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