New Delhi: The government expects to garner Rs 5,000 crore from the asset sale of central enterprises as the budget has raised the bar for divestment proceeds to a record of Rs 1.05 lakh crore this fiscal, according to a top official.
The government will follow a four-pronged strategy, including minority stake sales through IPO, FPO and ETFs, apart from strategic divestment and asset monetisation, to meet the disinvestment target, Secretary of Department of Investment and Public Asset Management (DIPAM), Atanu Chakraborty said.
The 2019-20 Budget has set a higher target of Rs 1.05 lakh crore from disinvestment for the current fiscal, compared to Rs 90,000 crore set in the Interim Budget.
Chakraborty said the steps laid down in the Budget ensures larger flow into the economy. “Without larger flow you cannot have capitalisation and disinvestment receipts, whether from strategic or minority stake sale,” he said.
He said the new concept of asset monetisation or asset recycling is picking up pace gradually but is unlikely to fetch high receipts in the current fiscal.
“Asset recycling or asset sale will happen this year. We do not expect on that side a very large amount to start with. I will be very happy if we can do sales worth 5,000 crore this year,” Chakraborty said.
Recalling the experience of launch of government’s first Exchange Traded Fund (ETF), he said in the first year of ETF, way back in 2014, the amounts were very small.
The government had raised Rs 3,000 crore from the New Fund Offer (NFO) of CPSE ETF in 2014.
“Asset sales, specially when it comes to DIPAM, they are the nuttiest properties which they themselves have not been able to sell. Therefore, they are never so easy as it seems to people,” he said.
Chakraborty said land parcels, including of enemy property, and residential quarters would be the first things to be put up on the block for monetisation.
“Enemy properties is also land but those are largely right now what we have is agricultural land. More land will come up. Because there are issues related to enemy properties, there are some court cases, some encroachments, so on and so forth. I cannot sell any property till the title is absolutely clear and clear possession,” he said.
DIPAM is scouting for consultancy firms for assistance in selling land and building assets of public sector companies and the last date for submission of bids is 11 July.
The non-core assets could be categorised broadly into land and buildings, brownfield operational assets such as pipelines, roads, mobile towers, electricity transmission lines. It could also include financial assets, like equity shares, debt securities, other hybrid/structured finance asset units and other miscellaneous assets.
Giving details on strategic disinvestment, Chakraborty said in the last two years, five CPSEs have been sold off which fetched about Rs 52,000 crore to the exchequer out of total Rs 1.90 lakh crore raised through CPSE stake sale.