Budget 2018: Modi govt targets disinvestment receipts of Rs 900 billion
Eyeing Rs 1 trillion budget target through disinvestment for next fiscal, the Modi government may end FY18 with Rs 900 billion selloff, almost twice the record figure of Rs 460 billion achieved last year, on the back of its stake sale in Hindustan Petroleum Corporation (HPCL) to Oil and Natural Gas Corporation (ONGC), according to The Time of India report.
The deal is likely to fetch the government Rs 300 billion, the report said quoting sources. The sale of the government's stake in HPCL to ONGC is stuck on valuation. According to persons close to the development, the effort was to close the deal before the end of this month but the government was looking at getting a higher value for its 51.1 per cent stake in HPCL. Based on the current market capitalisation, a 51 per cent in HPCL is valued at Rs 323 billion, about Rs 23 billion higher than in last July when the Union Cabinet had cleared the selloff. However, reports suggest that after evaluating the marketing network, physical assets and brand value of HPCL, the valuation could be around Rs 450 billion. The Cabinet Committee on Economic Affairs had given inprinciple approval for the strategic sale on July 19 last year. The government's non-tax revenue is hugely dependent on the deal. As on January 2, total disinvestment proceeds for 2017-18 stood at Rs 538 billion against the target of RS 725 billion set by Finance Minister Arun Jaitley. If the ONGC-HPCL deal works out, this will be first time since 2009 that the government would be surpassing the disinvestment target for more news on budget 2018.