Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Government Sets Ambitious Disinvestment Target
Mon, 6 Feb Pre-Open

Any government requires funds to invest in large scale infrastructure. It needs to invest in the economy to encourage spending. It also has to run social programmes to provide health and education services. Not to mention, it requires financing for retiring government debt.

And how do governments manage such humongous expenses?

By earning revenue through tax collection. This includes direct as well as indirect taxes. But is this enough to meet expenses? Not even close. When a government's total expenditures exceed the revenue, it is called a fiscal deficit. India has been mired in a fiscal deficit situation since independence.

How can the government reduce fiscal deficit? It could increase taxes. It could reduce its expenses. But both of these options could have an adverse impact on the country's GDP growth.

However, there is one more option that the government can use: Disinvestment.

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

Disinvestment typically refers to sale from the government, partly or fully, of a government-owned enterprise. Disinvestment is another route through which the government can raise funds for meeting needs.

In every Budget, the government sets a target for disinvestment. In Budget 2017-18, the government has boldly set its highest target till date - Rs 72,500 Crore.

To achieve this target, the government would use various routes such as minority stake sales, buybacks, employee offers-for-sale, initial public offerings (IPOs) and through the central public sector enterprises (CPSE) exchange-traded funds.

The finance minister said in the Budget speech that IPOs for rail PSUs like IRCTC, IRCON and IRFC would be listed. The IPOs of Cochin Shipyard and Hudco are also pending. Funds are expected to come from the listing of New India Assurance, United India Insurance, Oriental Insurance, National Insurance and the General Insurance Corporation of India.

Besides IPOs, the Centre has already announced it would offload its stake in Pawan Hans, National Project Construction Corp (NPCC) and Project and Development India (PDI). For the coming year, strategic sales would also include a major chunk of the Rs 60,000 crore worth of stakes that the government holds in Axis Bank, Larsen & Toubro and ITC through the Specified Undertaking of Unit Trust of India (SUUTI).

Fiscal 2016-17 is the seventh year in a row when the government would not be meeting the disinvestment target fixed in the Budget. Will the government achieves this ambitious target of Rs 72,500 crore for fiscal 2017-18? Anything is possible.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "Government Sets Ambitious Disinvestment Target". Click here!


Views on News

How Did Mindtree Perform in Q4FY21? (Company Info)

Apr 20, 2021

Here's the rundown on the company's latest quarterly results.

Tax Concerns Weigh on Bitcoin as Prices Slip Below US$ 50,000 podcast (Views On News)

Apr 23, 2021

In this article, we discuss why Bitcoin prices fell below US$ 50,000.

Axis Small Cap Fund: Tiding over Volatile Market (Outside View)

Apr 23, 2021

PersonalFN's analysis on the features and performance of Axis Small Cap Fund.

The Indians Are Back! (Fast Profits Daily)

Apr 23, 2021

In this video, I'll show you why the gold and silver bull markets are back on track.

The One Thing We Know for Sure (Profit Hunter)

Apr 23, 2021

On Equitymaster's 25th anniversary, there is one thing we are completely sure about.

More Views on News

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

Top 3 Nifty ETFs to Buy Now (Fast Profits Daily)

Apr 20, 2021

In this video I tell you the three Nifty ETFs I think are the best.

A Stock with 700% Return Potential Comes with Additional Payoffs (Profit Hunter)

Apr 15, 2021

Narayana Murthy was one of the first unicorn founders to get the backing of this entity...

11x Bankruptcy to Bluechip Stock: A Rare India Revival Story (Profit Hunter)

Apr 16, 2021

There is no stopping this 11-bagger stock from significant upside.

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Apr 23, 2021 (Close)