NEW DELHI: Over two months into the financial year, the Centre has raised approximately Rs 20,000 crore from disinvestment and asset sales, advancing its strategy to generate resources through non-tax revenue amid mounting subsidy bills due to the West Asia conflict. The funds collected so far represent about 25% of the full-year target.
Subsidy Pressures Mount
The fertiliser ministry has already requested a doubling of the subsidy for the current fiscal year, which was initially budgeted at Rs 1.7 lakh crore. The government is also urging domestic players to increase fertiliser production as global prices rise. Additional uncertainties include ship availability and several fertiliser suppliers exiting the market.
Furthermore, the Centre has provided over Rs 1.2 lakh crore in support to the oil sector, including excise duty cuts, to mitigate the impact of high crude prices.
No Immediate Spending Review
Oil companies have raised prices, and further hikes are expected in tranches. The government will also need to subsidise cooking gas cylinders, as oil companies are currently incurring losses of around Rs 700 crore per day. While spending cuts or realignments are not planned at the moment, a senior official ruled out seeking parliamentary approval for additional expenditure during the monsoon session. A clearer picture of revenue and expenditure will emerge around mid-July after the first quarter trends are available. “There is no need to review our spending plans at the moment as we had factored in global uncertainty when the budget was presented,” an official said.
Disinvestment and Asset Monetisation Drive
The disruptions caused by the West Asia conflict have prompted the finance ministry to accelerate fund-raising through disinvestment and asset monetisation. Officials said Finance Minister Nirmala Sitharaman is reviewing the situation, and the Department of Investment and Public Asset Monetisation (DIPAM) and the Department of Public Enterprises have a pipeline ready for the full year and the medium term.
So far this year, Rs 12,166 crore has been raised through disinvestment and another Rs 6,367 crore from asset monetisation. DIPAM has relied on offer-for-sale to raise money from Central Bank of India, Coal India, and NHPC. The government’s offer to divest up to a 3% stake in NLC India, which was subscribed 5.2 times on the opening day, is expected to raise an additional Rs 1,260 crore. Apart from the IDBI Bank stake sale, where the process remains unclear, most other strategic sale plans have not made significant progress.
