The slowdown in the global economy, accentuated by the Covid-19 pandemic, has cast serious doubts over the ambitious disinvestment target of over two trillion that the government had set.
The two most high profile state entities- Air India and Bharat Petroleum are unlikely to be sold this year. As a result, the disinvestment proceeds this year may just be a fraction of the target.
The Reserve Bank of India and the International Monetary Fund, both have said that the impact of Covid-19 pandemic is pushing the global economy into a severe recessionary phase.
Official government circles believe that the impact of the pandemic could be spread over an entire year. Aviation and energy sectors have taken the biggest hit due to reduced economic activity. These factors will have an effect on the interest of the prospective buyers for Air India and BPCL.
Of the targeted 2.1 trillion, the centre plans to garner Rs 90,000 crore from the sale of its stake in the state-owned financial institutions.
For FY 21, the centre was counting on the sale of Air India, BPCL, Concor and Shipping Corp, and the initial public offering of LIC India. The date for submission of expression of interest for BPCL has already been pushed to June 13, and the same is likely to be done for Air India and some other entities also.
