Budget 2022: Why Go Slow On Disinvestment?
By Ashwini Agarwal
First publised on 2022-02-02 08:12:14
About the Author
After the huge disinvestment target of 1.75 lakh crore announced in the Budget speech last year, this year Finance Minister Nirmala Sitharaman gave disinvestment a (strategic?) miss. What could be the reason or reasons for the same?
Firstly, the government did not work efficiently to achieve the target last year. As a result, only Rs 78000cr were raised. Although the stock markets were buoyant and private companies raised huge capital, the government somehow lost the plot and could not go ahead with disinvestment plans. That could have made it shift focus for the time being.
Then, there was a he hue and cry from the opposition which termed selling PSUs as "sell-off of national assets". In the politically surcharged atmosphere, with elections in five states in February and March, that could also have been one of reasons of going slow on disinvestment. Further, with joblessness rising, the government might also not want to give the picture that instead of making efforts to create jobs it is selling off government companies that provide jobs.
The Finance Minister has budgeted only Rs 65000cr from disinvestment in FY 2022-2023. She steered clear of mentioning disinvestment or asset monetization in her speech. But after the National Monetization Pipeline announced with much fanfare last year, she should have spelled out how much was to be raised in the next fiscal and what assets would be taken up.
There is no doubt that idle assets and loss making firms like Air India are a big drain on government finances. It is prudent to use idle assets to generate funds and sell-off loss-making, or even profit-making, PSUs in non-strategic sectors to decrease the involvement of government in business. Hence, the total lack of focus in the Budget in this area is incomprehensible and will put disinvestment back by a year.
picture courtesy: dipam, caption ours
