Moving away from a disinvestment target: Dipam secy Tuhin Kanta Pandey

He said that of the Rs 30,000 crore miscellaneous receipt for FY24, the Centre expects to get about Rs 12,000 crore from asset monetisation and Rs 18,000 crore from disinvestment

It is important to keep in mind that disinvestment should be a gradual, calibrated process, rather than a big bang one, and that’s why the government is shunning the ‘targeting’ approach from next year, Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (Dipam), told Shreya Nandi in an interview. He also said that of the Rs 30,000 crore miscellaneous receipt for FY24, the Centre expects to get about Rs 12,000 crore from asset monetisation and Rs 18,000 crore from disinvestment. Edited excerpts:

Can you help us understand the breakup of the receipts of Rs 30,000 crore in the current financial year?

There has been a shift in our approach, in terms of a standard target fixation for disinvestment. (In the FY24 Budget Estimates) out of Rs 61,000 crore, Rs 51,000 crore was for disinvestment and Rs 10,000 crore was for asset monetisation. To put it together, it was a part of miscellaneous capital receipts, which is a part of non-debt receipts. So the question is why are we not upfront telling the disinvestment receipts? If you were to ask me, I would say there is no specific disinvestment target. 

According to FY24 BE, the government had estimated Rs 10,000 crore from asset monetisation. How much have we achieved till now?

In the Revised Estimates (RE) for FY24, we are likely to get about Rs 12,000 crore from asset monetisation in this financial year, and about Rs 18,000 crore from disinvestment. (Of the Rs 18,000 crore, the government has already raised Rs 12,054 crore as disinvestment receipts).

What about the next financial year’s disinvestment and asset monetisation target? How much can we expect from disinvestment?

Capital receipts could also include items, which are not classified elsewhere. In the case of asset monetisation, the proceeds from the national asset monetisation pipeline go to the public sector unit, and not to the government. However, when departments such as the Housing and Urban Development Department, mining, or the National Highways Authority of India (NHAI) (which is not a PSU) monetise assets, there will be clear receipts to the consolidated fund of India.

We are shunning this targeting approach precisely for this. A single number for disinvestment targets is problematic because it is also in some sense, opportunistic. It's not really hamstrung on a Budget. Unlike taxes, which are predictable, based on legislation, disinvestment is not a legislative exercise, that you have to disinvest, come what may. GST has to be paid in income tax estimates. So those receipts are estimates, but they are far more predictable because they're backed up by legislation. So you have to get it and the public is bound to give it to you.

Disinvestment is voluntary. Suppose, the market is not good, then you don’t go ahead with it. Suppose the market is good, but you may think that it would be better. We also need to take cognisance of the dividends received and it's also a sustainable revenue because we get dividends year after year after year, and retain the profitability. Disinvestment is a one-time thing. In my opinion, we should take a holistic approach to disinvestment dividends put together. Secondly, we should always keep in mind that it should be a gradual, calibrated process rather than a big-bang process. 

How much of the monetisation receipts have come from NHAI?

This information flow actually goes to DEA (Department of Economic Affairs under the finance ministry) and we will sort it out and get that flow also. Right now, the advantage is that with disinvestment, you get real-time data, but on asset monetisation, we don’t have the accounting data. For instance, if the mining department has done some asset monetisation, it is not clearly receipts. It's based on the future flows and the present value of that. The visibility will take time, we are working on that.

Could you give us the roadmap for the remaining months of this financial year? How do you aim to garner around Rs 6,000 crore through disinvestment by March-end? What will be the priority for next year?

Won’t be able to share the roadmap. We don’t want to disclose the timing of the transaction. We may even get more or even less than Rs 18,000 crore.

But overall, let us not get into an unnecessary desperate situation because desperation will mean that the market overhang will come and will depress the stock, except when it is privatisation, when we will make an announcement.

What is the progress on the IDBI deal? What is the road ahead for BPCL?

Discussions are going on at the level of the Reserve Bank of India. The examination is on. We can expect it next year. It’s in the pipeline.

In the case of BPCL, we had made it clear that an announcement would be made when we decided to go ahead with the launch. So, we will have to make a fresh launch.

What are the timelines for long-pending stake sales in Shipping Corporation of India, BEML, NMDC Steel, CONCOR?

These stake sales will spill over next year. Shipping Corporation of India demerger, the listing process is going on. CONCOR’s expression of interest is yet to be launched. Even if it is launched next year, it cannot be concluded. It will take at least 1.5 years. Clearances from the state government are still pending in the case of BEML. We are pursuing that. In between, there was an election, as well.