The Indian government should focus on privatisation of state-run companies instead of chasing high divestment targets, a top finance ministry official said on Tuesday, pointing to market volatility and investors' shaky appetite for risk, Reuters reports.
Last fiscal year, the government raised just over 135 billion rupees ($1.6 billion) from the sale of stakes in state-owned firms, a fraction of its target of 1.75 trillion rupees and missing its divestment goal for a third straight year.
"We should actually have moderate targets and more focus should be on privatising," Tuhin Kanta Pandey, secretary in the Department of Investment and Public Asset Management, said in an interview.
The Indian government has set a 650 billion rupee ($7.89 billion) divestment and privatisation target for 2022/23, out of which it raised 245.44 billion rupees in the first seven months of the fiscal year.
High targets lead to a perception that the government will sell minority stakes in state-run companies, prompting a fall in share prices of such firms, Pandey said.
Finance Minister Nirmala Sitharaman last year announced plans to privatise all state-run companies barring a few in strategic sectors such as defence and telecommunications.
Pandey said the government was at an advanced stage for inviting initial bids for privatisation of state-owned logistics firm Container Corp of India and two former subsidiaries of Air India.
The sale of a majority stake in IDBI Bank is likely to be completed in the next fiscal year that starts Apr 1, 2023, he said.
"Closure of IDBI Bank transaction will depend on response from interested bidders and time taken for due diligence."
Earlier this month, India invited initial bids to sell a 60.72 per cent stake in IDBI Bank.