The government's divestment target of Rs 30,000 crore is almost 25 percent less than Rs 40,000 crore it had set for itself last year. There were suggestions to stick to the same this year too. But the finance minister, after much consultation, decided to stick to a lower 'much credible target ' of Rs 30,000 crore, explains divestment secretary Mahammad Haleem Khan.
In an interview with CNBC-TV18 , Khan also said that looking at the fiscal deficit numbers of 2012, an ambitious target might make the deficit numbers look prettier. But given the government's terrible performance at meeting its target last year, credibility is the top agenda this time around.
The government only managed to generate Rs 14,500 crore this year, of which Rs 12,733 crore came from ONGC share auctions. National Buildings Construction Corporation, or NBCC's, initial public offering is due to open on 22 March, which will fetch the government another Rs 200 crore. The exact price band and other details will be known after a government meeting today in the evening, said Khan.
He added that there were no details available on the Bhel FPO (follow-on public offer) as the government will decide on the stake sale after reviewing the pilot auction of ONGC.
However, the government will focus on IPO s to meet its target. IPOs are essential for a multi-layered oversight mechanism. It not only mobilises funds but also improves corporate governance.