Buybacks and LIC fuel record FY17 disinvestment

If not for the two, proceeds would have been slim

Financial year 2016-17 is set to go down as a record year for government disinvestment. With nearly Rs 37,200 crore raised so far proceeds have already surpassed the previous best of Rs 24,348 crore in 2014-15. However, a closer look at the data shows close to half of the divestment proceeds this fiscal have been on account of share buybacks. Also, most of the share sales done through the open market have been bailed out by state-owned financial institutions, particularly insurance giant Life Insurance Corporation of India (LIC).

Market players say buybacks and bailouts defeat the basic principles of disinvestments which