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The government is planning to raise Rs 65,000 cr through divestment in public sector companies in the current financial year

by Koushik Gope
Published: Last Updated on 0 comment

The government of India has set a target of raising Rs 65,000 crore through divestment in public sector companies in the current financial year. This is the highest divestment target ever set by the government.

The divestment proceeds will be used to fund the government’s infrastructure and social welfare programs. The government has identified a number of public sector companies for divestment, including Bharat Petroleum Corporation Limited (BPCL), Hindustan Zinc Limited (HZL), Container Corporation of India Limited (CONCOR), and Shipping Corporation of India Limited (SCI).

The government has already raised Rs 31,106 crore through divestment in the current financial year. This includes the proceeds from the initial public offering (IPO) of Life Insurance Corporation of India (LIC), which raised Rs 21,000 crore.

The government is facing some challenges in meeting its divestment target. The global economic slowdown has made it difficult to attract buyers for public sector companies. Additionally, there is some political opposition to divestment, as some people believe that it will lead to job losses.

Despite these challenges, the government is confident that it will be able to meet its divestment target. The government has said that it will take all necessary measures to ensure that the divestment process is successful.

Here are some of the key challenges that the government is facing in meeting its divestment target:

  • Global economic slowdown: The global economic slowdown has made it difficult to attract buyers for public sector companies. Investors are more cautious about investing in new projects, and they are also more likely to demand a higher price for public sector companies.
  • Political opposition: There is some political opposition to divestment, as some people believe that it will lead to job losses. The government will need to address these concerns in order to get the support of the Parliament and the public.
  • Complexity of the divestment process: The divestment process is complex and time-consuming. It involves a number of steps, such as identifying the right companies for divestment, setting a valuation, and finding buyers. The government will need to streamline the divestment process in order to meet its target.

Despite these challenges, the government is confident that it will be able to meet its divestment target. The government has said that it will take all necessary measures to ensure that the divestment process is successful. These measures include:

  • Focusing on strategic divestments: The government will focus on divesting strategic assets that are not core to the government’s business. This will make the divestment process more attractive to investors.
  • Using a variety of divestment methods: The government will use a variety of divestment methods, such as IPOs, strategic sales, and asset monetization. This will give the government more flexibility in meeting its divestment target.
  • Making the divestment process more transparent: The government will make the divestment process more transparent to build trust with investors. This will include publishing more information about the divestment process and holding public consultations.

The government’s divestment program is a key part of its economic reform agenda. The success of the program will depend on the government’s ability to address the challenges that it faces. However, the government is confident that it will be able to meet its target and raise the much-needed funds for its infrastructure and social welfare programs.

In addition to the challenges mentioned above, the government is also facing some other challenges, such as:

  • The need to ensure that the divestment process is fair and transparent.
  • The need to address the concerns of employees of the public sector companies that are being divested.
  • The need to ensure that the divestment process does not lead to job losses.

The government will need to carefully manage these challenges in order to meet its divestment target. However, the government is committed to the divestment program, and it is confident that it will be able to achieve its goals.

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