Liquidating the financial assets and the subsidiaries in India, Finance Minister Arun Jaitley on Friday said the government has achieved disinvestment of Rs 85,000 crore in the current fiscal, which is Rs 5,000 crore more than the set target for 2018-19, belying widespread expectations of a shortfall.
“As against a target of Rs 80,000 crore for disinvestment for the current year, the divestment receipts have touched Rs 85,000 crores today,” Jaitley said in a tweet. As of 28th of February this year the government had raised only Rs 56,473 crore through disinvestment, or 70 per cent of the full-year target of Rs 80,000. With uncertainties over some sell-offs, achieving the target seemed difficult at the beginning of this month.
Disinvestment is the action of the government selling or liquidating an asset or subsidiary. Absent the sale of an asset, disinvestment also refers to capital expenditure reductions, which can facilitate the re-allocation of resources to more productive areas within an organization or government-funded project.
While this happens, there are a bundle of reasons why a government or an organisation opts for disinvestments. Primarily motivated by the optimization of resources to deliver maximum returns, disinvestment may take the form of selling, spinning off or reducing capital expenditures. Concerns may decide on the disinvestment of holdings that no longer fit with their social, environmental or philosophical positions.
The Power Finance Corporation-Rural Electrification Corporation (PFC-REC) merger deal, by which the PFC acquired the government’s stake in the REC, has generated Rs 14,500 crore as disinvestment proceeds for the government. The Disinvestment Department, along with the PFC-REC and the Pawan Hans Ltd (PHL), was earlier working out the premium at which the government would sell its stake.
COURTESY:- NEWS BHARATI