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Disinvestment Gains Momentum: All Set To Hit Rs 65,000 Crore Mark By January-End
Swarajya Staff
Dec 10, 2018, 11:51 AM | Updated 11:51 AM IST
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As part of its disinvestment drive, the Union government has collected Rs 32,998 crore so far in the current financial year (FY19), 77 per cent of which has been derived from Exchange-Traded Funds (ETFs), as reported by Financial Express (FE).
Under the ETF mechanism, shares of many PSUs, operating in different sectors, are brought under a single umbrella fund for disinvestment purposes. Then the individual shares/units of such funds are offered to investors for purchase.
Disinvestment refers to the sale of shares/assets owned by the government in PSUs (Public Sector Units) in return for cash. It is also popularly termed as privatisation, as ownership of state-run companies is passed on to private individuals and companies.
The current NDA government is expected to earn around Rs 65,000 crore by the end of January 2019 through its disinvestment activities. However, the government might fall short of its ambitious target of collecting over Rs 80,000 crore before 31 March 2018. Also, it should be noted that the government has overachieved its disinvestment targets in the last two financial years. Last year, the centre earned Rs 92,500 crore. Many expected that the government could top that record and increase its earnings to over Rs one lakh crores.
The Union Cabinet recently gave its in-principle approval for the acquisition of REC (Rural Electrification Corporation) by PFC (Power Finance Corporation). This is part of the government's objective of raising around Rs 20,000 crore by selling government stakes in such PSUs to other larger government’ controlled companies.
Also Read: We Need A Big-Bang Listing Of LIC
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