Nirmala Sitharaman | ET Explains: Will February 1 be FM Sitharaman’s Thatcherite moment?

As India enters the final stretch before Budget, muted revenue collection has become the main talking point apart, of course, from the general downtick in economic growth.

The numbers under the non-debt capital receipts — more commonly known as disinvestment proceeds — look like an eyesore at the moment when seen in the context of the Budgeted target of Rs 1.05 lakh crore. Given the govt’s tight fiscal situation, the fear is that Budget 2020 may crimp spending — the very thing needed at the moment to pull the economy out of the morass.

Many economists have argued for a spending push in the Budget rather than a tax cut. With the fiscal wiggle room shrinking, the attention is now likely to shift towards a more enlarged disinvestment programme.

The NITI Aayog has handed DIPAM a list of non-core assets comprising around 50 CPSEs that the government can monetise. The other option for the govt is to liquidate its stake in bigger PSUs and private companies held through the Specified Undertaking of Unit Trust of India (SUUTI).

The picture will be clear in three days from now. For FM Sitharaman, February 1 could be the proverbial moment to borrow from Margaret Thatcher’s playbook and go on a privatisation spree — just like what the former UK Prime Minister did in the 1980s.

Let’s take a look at some of the silverware that might figure in the cash-strapped government’s sale list.

1. Liquid Assets: Shares in Big PSUs

The government can earn a windfall if it reduces its stake in big PSUs like ONGC, Coal India to 51 per cent. Here’s a brief break-up of government’s stake in some of the big PSUs in excess of 51%.

Coal India – Rs 21,658 crore

ONGC – Rs 17,369 crore

Power Grid – Rs 4,000 crore

NTPC – Rs 3,509 crore

An ET report had said that the government can sell its entire stake in private sector companies like ITC and Axis Bank held through SUUTI. As on September 30, 2018, SUUTI held around 9.63 per cent stake in Axis Bank, 7.97 per cent in ITC and 1.80 per cent in L&T.

Here’s how much it can earn the government:

ITC – Rs 22,867 crore

Axis Bank – Rs 9,594 crore

2. Strategic sale of PSUs

As part of its privatisation drive, the government has already listed some of its family silver for sale. Sale of Air India, BPCL can yield a bonanza for the government. Here’s how much the government will earn from the sale of these PSUs:

BPCL: Rs 53,935 crore

Shipping Corporation: Rs 1,786 crore

Power Grid: Rs 19,040 crore

3. Monestise assets through InvITs

The government can take the InvIT route to monetise some of the assets like power lines, gas lines, highways among others. This can help in raising necessary finances during a crunch.

4. Sell enemy property

Sale of enemy property alone can fetch up to Rs one lakh crore. The government has set up a group of ministers to oversee the process of sale of enemy properties numbering 9,406 in total.

5. Loss-making entities

NITI Aayog has made a list of loss-making entities that the government can sell. While it may not make for a windfall, it will at least save the money wasted in capital infusion into these PSUs.

(With inputs from Bureau)