Govt aims to reduce stake in state-run firms to minimum in FY20 to meet disinvestment target figure of Rs 1.05 lakh cr

New Delhi: The government will attempt to cut its shareholding in state-run companies in 2019/20 to the minimum required under the rules, a government official said, as it seeks to shore up Rs 1.05 lakh crore ($15.30 billion) through stake sales in the current fiscal year.

The government needed funds to meet its fiscal deficit target of 3.3 percent set for this fiscal year to March 2020.

The government aims to raise Rs 40,000 crore from exchange-traded funds, the official told reporters. The official declined to be identified.

The government will likely raise around Rs 30,000 crore from privatisation of state-owned companies in this fiscal year, the official said.

The government will initiate privatisation of Central Public Enterprises (CPSEs), including Air India, as it sets a record high disinvestment target of Rs 1.05 lakh crore that will see the government lowering its stake in some CPSEs to below 51 percent.

Presenting the Budget 2019-20, Finance Minister Nirmala Sitharaman said the government has been following the policy of disinvestment in non-financial public sector undertakings (PSUs)  maintaining the government stake not to go below 51 percent.

The government has set an all-time high disinvestment target of Rs 1.05 lakh crore, up from Rs 90,000 crore projected in Interim Budget 2019-20 in February.

In 2018-19, the government raised Rs 84,972 crore from CPSE disinvestment, while in 2017-18, the figure was Rs 1,00,056 crore.

— With PTI inputs