New Delhi: India’s plan to sell $14.7 billion of government-owned assets to plug its budget deficit is seen falling short by nearly half, according to people familiar with the matter.
Receipts from disinvestment in the year to March are expected to be between Rs500 billion (Dh25.6 billion, $7 billion) and Rs600 billion against the target of Rs1.05 trillion, the people said, asking not to be identified as the numbers are in the process of being finalised. Complex sale process for some of the assets means the government will run out of time this year, they said.
A spokesman for the Finance Ministry wasn’t immediately available for a comment.
The shortfall will add to the financial problems of the treasury, which is already grappling with lower-than-expected tax collections. The revenue crunch amid an economic slowdown is putting pressure on the budget, with a senior official seeing the fiscal deficit widening to 3.8 per cent of gross domestic product in the current fiscal year against the 3.3 per cent target.
The government will try to push through sale of minority stakes, including through exchange-traded funds, to raise revenue, the people said.
India has achieved only about 17 per cent of the disinvestment target so far this year, while tax collections are 46 per cent of the budgeted aim. In the absence of a steady revenue stream, authorities have withheld some payments to states and have capped ministries’ expenditure.
Finance Minister Nirmala Sitharaman has refused to comment on the deficit goal before the official budget presentation scheduled for February 1, when she will also present the revised revenue and expenditure statement.