Centre is all set to once again miss the  disinvestment target this fiscal too, but the rich flow of public sector dividends and record surplus transfer from RBI in 2023-24 has helped comfortably cover the expected shortfall in disinvestment receipts, latest interim budget documents for 2024-25 showed. 

“Disinvestment and dividends are opposite sides. Non tax revenue (dividends and profits) jump this fiscal by ₹75,000 crore is a bigger story playing out. Next year we have in budget estimate added ₹1 lakh crore of non tax revenues (BE over BE). Dividend plays a crucial role in non tax revenues and one has to look at both disinvestment and dividends and profits taken together to assess performance”, Tuhin Kanta Pandey, Disinvestment Secretary said on Thursday. 

He was responding to a query on why Centre was year after year finding it tough to meet the disinvestment target specified in budget. 

As against earlier set budget estimate (disinvestment target) of ₹51,000 crore, the revised estimate for this fiscal has been pegged at ₹30,000 crore. Disinvestment receipts as of January 31, 2024 stood at ₹12,504.32 crore, which was 24.5 per cent of the FY24 budget estimate of ₹51,000 crore.

However, receipts from dividends and profits for 2023-24 came in at ₹1,54,407 crore (RE) against budgeted level of ₹91,000 crore. This strong show on dividends has encouraged Centre to peg the budget estimate on dividends from PSEs at robust ₹1,50,000 crore. This ₹1,50,000 crore comprised of ₹ 1,02,000 crore expected surplus transfer from RBI and ₹48,000 crore as dividends from public sector enterprises. 

The slow progress on disinvestment front in 2023-24 has been covered by RBI’s record dividend transfer of ₹87,400 crore this fiscal, which has resulted in higher than budgeted collection of non tax revenue this fiscal. 

Total non tax revenue of the Centre exceeded the budget estimate by about ₹74,000 crore at ₹3,75,795 crore. For 2024-25, Centre has budgeted non tax revenue of ₹3,99,701 crore. 

Pandey highlighted on Thursday that Centre goes by value unlocking principle in  disinvestments. 

He noted that 61 listed CPSEs and 16 PSBs had three years back (Jan 1, 2021) commanded a combined market capitalisation of ₹15 lakh crore. Today their combined market capitalisation is ₹58 lakh crore. 

“We have created ₹ 43 lakh crore wealth in public sector and this has been shared with minority shareholders. You are not seeing the wealth effect but only looking at how much has been removed out of it. Wealth generation is also equally important”, Pandey said.

Since 2014, Modi government has disinvested ₹4.2 lakh crore and taken dividend of ₹4.5 lakh crore from CPSEs. “Against this ₹8.5 lakh crore we have in last one year added market capitalisation of ₹25 lakh crore. Value unlocking story involves improving wealth and taking the value of share as well”, Pandey noted.