The government has achieved 78% of its FY27 budgeted disinvestment and asset monetisation target of ₹80,000 crore within just 5 months of the financial year. According to The Times of India, the government has raised ₹55,757 crore so far this fiscal through minority stake sales in 9 PSUs, including major transactions in Life Insurance Corp (LIC) and Coal India. More than half of the disinvestment proceeds came from the 6.5% stake sale in LIC which garnered ₹31,515 crore, while a 2% share sale in Coal India fetched ₹5,542 crore and a 6.01% stake dilution in NHPC raised ₹4,357 crore. The government also sold 6% stake in Hindustan Copper to raise ₹3,041 crore, with other entities including Central Bank of India, NLC India, GIC, IRFC, Cochin Shipyard and Hindustan Copper also contributing to the total. In addition, ₹6,367 crore has been raised through asset monetisation via InvITs, bringing total capital receipts from disinvestment and asset monetisation to ₹62,124 crore, which represents approximately 78% of the full-year budget target.
Stronger tax collections and easing global fertiliser costs are providing additional support to the government's fiscal position. As reported by Business Standard, net tax revenue reached more than a fifth of full-year estimates in the June quarter, compared with 19% a year earlier, with overall revenue receipts reaching 28.7% of the annual target, up from 26.9%. The improving fiscal outlook contrasts with the start of the financial year in April, when the government cut fuel excise duties to protect consumers from higher energy costs, hitting its revenue by about ₹1.23 trillion ($12.9 billion). By June the situation was so dire that officials were prepared to let the deficit widen to as much as 4.8% of gross domestic product while reassuring ratings firms that any slippage would reflect global shocks rather than a retreat from fiscal discipline.
The fertilizer and finance ministries have been in regular touch to discuss projections for the subsidy bill, which is now seen around ₹2.3 trillion ($24.1 billion) in the current fiscal year through March, down from estimates of as high as ₹3 trillion in April. According to Bloomberg News reports cited by Business Standard, the decline is driven largely by a 60% plunge in urea prices from their April peak to below $400 a ton in the latest tender. Fertilizer subsidy accounts for 3.2% of total government expenditure, with further support coming from Russian President Vladimir Putin's pledge to boost fertiliser shipment to India.
A strategic sale in IDBI Bank remains on the table after a failed attempt earlier this year to sell it. As reported by Business Standard, the government has received revised bids from Dubai-based Emirates NDB and Prem Watsa-led Fairfax Financial Holdings for the privatisation. An announcement on the IDBI deal is expected soon, as reported by people familiar with the situation. The government is pushing the pedal on disinvestment and asset monetisation in the current fiscal amid concerns over expenditure exceeding budget estimates due to higher energy and fertiliser import bills.
The government's current performance builds on a mixed track record in recent years. According to Business Standard, in 2021-22 and 2022-23, against the RE of ₹78,000 crore and ₹50,000 crore respectively, the government actually raised ₹13,534 crore and ₹35,294 crore respectively. In 2019-20 and 2020-21, against the RE of ₹65,000 crore and ₹32,000 crore, the actual realisation was at ₹50,300 crore and ₹32,886 crore respectively. The government has set a 4.3% fiscal deficit target for FY27, with capital receipts by way of disinvestment and asset monetisation standing at ₹62,124 crore so far this fiscal, which is about 78% of the full year budget target. The government stopped fixing separate disinvestment targets from the Revised Estimates of FY2023-24, instead budgeting amounts under Miscellaneous Capital Receipts, with targets of ₹30,000 crore for RE FY2023-24, ₹33,000 crore for RE FY2024-25, ₹33,837 crore for RE FY2025-26, and ₹80,000 crore for BE FY2026-27.
