by Harish Gupta, National Editor, Lokmat Group
Govt. Disinvestment plan goes for a toss
BPCL, Air India waiting for buyers
Massive short-fall in revenue collections
Harish Gupta
New Delhi, Jan. 7
The divestment plans of the Modi government has taken a big hit this fiscal as plans to earn more than Rs one lakh crores by selling a few Navratna PSUs have taken a big hit.
A worried Prime Minister Narendra Modi is now prodding the captains of the industry personally to invest after the major cut in corporate taxes and series of measures taken by his government. In fact, the Modi government could raise only
Rs 17,364 crore through divestment during 2019-20 so far. The plans to sell BPCL, Concor, Air India and several others have not yielded any results.
The luck-luster response even from the foreign investors to buy businesses has made the Modi government to re-work modalities to raise hundreds of thousands of crores needed to fill the government coffers as revenues are dwindling. The GST collections are down by as much as Rs 1.18 lakh crores during 2019-20 and direct tax collections are far below the estimated growth. The short-fall in net revenue collection could be as high as Rs 2.50 lakh crores if divestment targets are not met.
The desperate government is now wanting to sell the BPCL for a song. Though the real value of the BPCL is more than Rs 1.50 lakh crores, it is willing to off-load it for Rs 75000 crores only. The government is now spending less on projects and social welfare schemes as a measure to keep the fiscal deficit in check. The big-bang VRS plan for the BSNL employees to dole out Rs 69000 crores is also being delayed as there is no money in the kitty. The down-fall in the financial markets including the sensex had caused anxiety in the government.
In the global uncertain conditions and growing social unrest in India has vitiated the investment climate. The foreign funds believe in making quick money in the share market and walk away rather than put up long term investment in plants. It is in this background that the government is unlikely to complete the strategic sale of Bharat Petroleum Corporation (BPCL), Container Corporation of India (Concor), and Air India by March-end.
The Prime Minister's meeting with the industrialists yesterday has not yielded expected results. The PM candidly asked them to give frank suggestions to boost the economy rather than praising him and economy. They told him in one voice that consumer sentiment required a boost.
Ends
