NEW DELHI: Demonetisation appears to have hobbled the Union government’s disinvestment target of Rs 56,000 crore for 2016-2017 with a liquidity crunch. The NITI Aayog had prepared a disinvestment list of 26 public sector undertakings, of which the Cabinet had approved 17. The think tank had also, sources said, handed over a list of PSUs for strategic sale to China; a matter discussed during the Indo-China strategic economic cooperation meeting last month in Delhi.
“The private sector’s appetite for investment now looks dubious,” said a NITI Aayog source.
With about four months left for the financial year to end, officials believe there is no option but to raid the deep pockets of giant public sector financial institutions like the Life Insurance Corporation (LIC).
“NITI Aayog is for outright sale of PSUs like Cement Corporation of India, Tyre Corporation of India and Electronics Corporation,” added the source.
Missing the disinvestment
target could be a headache for the Finance Ministry, following a domino effect on the fiscal deficit target, which the government is constitutionally bound to meet under the Fiscal Responsibility and Budgetary Management (FRBM) Act.