‘6-7% LIC stake dilution enough to mop up Rs 90,000 crore’

New Delhi: The government’s Rs 2.1 lakh crore sell-off target is achievable with half of this amount expected to be met through the spill-over deals of Air India, BPCL and Concor and the remaining Rs 90,000 crore through just 6-7 percent stake dilution in state life insurer LIC, Chief Economic Advisor K.V. Subramanian has said amid questions being raised over meeting such a huge amount when the current fiscal disinvestment revenue target was lowered by 40 percent.

As per Budget 2020, out of the Rs 2.1 lakh crore target, Rs 1.2 lakh crore is expected to come from IPOs, strategic stake sales, buybacks, and OFSs, while the government expects to raise Rs 90,000 crore through the sale of stakes in state-owned life insurance company LIC and IDBI Bank.

Doubts of disinvestment targets not being possible to be met next fiscal have been raised at various quarters as apart from a higher amount of Rs 2.1 lakh crore, the government has also lined up listing of Life Insurance Corporation which needs a change in the LIC Act and several other changes prior, which could be time-consuming enough to be completed in 10-12 months.

The uncertainty over meeting the target also arises as most of these deals depend also on conducive market conditions (as in the case of IPOs) to be able to sail through and also on the foreign and domestic bidders in case of BPCL and Air India.

The Chief Economic Advisor, however, has said the target is not insurmountable and can be achieved well within time. He said even a below 10 percent listing of LIC has the ability to fetch about Rs 90,000 crore of the total Rs 2.1 lakh crore target and LIC’s amendment procedures should not pose any extra time limit on the sell-off schedule. (IANS)

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