Faced with a challenging year ahead that could see a possible fund crunch, the Finance Ministry has kept the option open for selling stake in at least one of the firms held through the Specified Undertaking of the Unit Trust of India (SUUTI).

“Nothing is cast in stone. It is not mentioned in the Union Budget 2016-17, but the option is definitely there and will be taken up in the second half of the fiscal, based on how the finances pan out,” said a senior official. However, he ruled out a strategic stake-sale in Hindustan Zinc and Balco this fiscal, noting that the emphasis would be on exiting other State-run firms. The Centre holds 11.98 per cent stake in Axis Bank, 8.34 per cent in L&T, and 11.19 per cent stake in ITC through SUUTI, as on December 2015.

A decision would be taken based on a number of factors, including oil prices, buoyancy in tax revenue as well as proceeds from disinvestment in public sector units.

Pay Commission budget

Though it had mulled the option of further disinvestment in SUUTI holdings in 2015-16, too, the Centre had managed to keep the fiscal deficit in check through savings and additional revenue for crude oil. It has last 9 nine per cent stake of its stake in Axis Bank that was held through SUUTI in March 2015, which had helped raise ₹5,500 crore.

However, it faces additional pressures in 2016-17 from the implementation of the Seventh Pay Commission recommendations that are expected to cost at least ₹1 lakh crore and uncertainty over global crude oil prices, which could upset its Budget calculations.

The Centre has also set an ambitious target of ₹56,500 crore from disinvestment proceeds this fiscal, which includes ₹36,000 crore from minority stake sales and another ₹20,500 crore from strategic sales in PSUs. But the actual realisation may be much lower, as was seen in previous years.