The Indian government may not be able to close the BPCL and Air India disinvestment transactions by March 31, although it is pushing the sale of five large public sector companies, including BEML, for which it sought interest from potential buyers. With BEML and Shipping Corporation last week, four large state-run entities have been put on the block, and Concor is to be offered for sale as soon as the Railways can decide on the policy. A proposal for the land use policy, a key to Concor disinvestment, is pending for Cabinet approval, sources said.
Although this will mean that the Narendra Modi government will close another year without a significant strategic sale, official sources said the process has now been set in motion. Against a target of £12 billion, the Centre has so far mopped up £1.38 billion with the sale of some shares held by SUUTI, along with a few public issues and buyback of shares expected to yield another £1.3 billion during the remaining 12 weeks of the current financial year.
In addition, LIC stake sale through the initial public offer route will remain incomplete this year as the government needs to amend the law. Similarly, a final call on IDBI Bank stake is yet to be taken. Through the two entities, finance minister Nirmala Sitharaman had hoped to rake in another £9 billion when she had budgeted for record disinvestment receipts of £21 billion for 2020-21. Officials blamed Covid-19 as the key factor as nearly six months were wasted due to the lockdown. Besides, the government wanted the process to have sufficient takers and several of the sectors hit by the pandemic to recover before treading on the disinvestment path.
The Department for Investment and Public Asset Management (Dipam) secretary Tuhin Kanta Pandey had indicated that the BPCL sale may go through this year. Besides, the government was striving to list LIC during the current fiscal year but the absence of the winter session of Parliament added to the Covid woes on disinvestment as the Bill to amend the law could not be introduced. In case of BEML, the Centre has decided to sell a 26% stake out of its shareholding of 54%, along with management control. As is the case with other PSU selloffs, non-core land and assets will be hived off and will not be a part of disinvestment.
