Government Achieves 78% of FY27 Divestment and Asset Monetisation Target in Five Months

The Indian government has achieved approximately 78 percent of its budgeted disinvestment and asset monetisation target for FY27 within the first five months of the financial year. Total capital receipts from these channels have reached ₹62,124 crore against a full-year Budget target of ₹80,000 crore, amid efforts to meet a 4.3 percent fiscal deficit target for FY27.

Of the total capital receipts, the government raised ₹55,757 crore through minority stake sales across nine public sector undertakings (PSUs), along with the strategic sale of Indian Medicines Pharmaceuticals Corporation Ltd and remittances from SUUTI. Major contributions came from a 6.5 percent stake sale in Life Insurance Corp (LIC), which garnered ₹31,515 crore, accounting for more than half of the total disinvestment proceeds.

Additional capital was generated through a 2 percent share sale in Coal India, which fetched about ₹5,542 crore, and a 6.01 percent stake dilution in NHPC, contributing ₹4,357 crore to the exchequer. Earlier in the week, a 6 percent stake sale in Hindustan Copper raised ₹3,041 crore. Other entities where the government reduced its stake include the Central Bank of India, NLC India, GIC, IRFC, Cochin Shipyard, and Hindustan Copper.

In addition to equity dilutions, the government raised ₹6,367 crore through asset monetisation via Infrastructure Investment Trusts (InvITs). Meanwhile, the strategic sale of IDBI Bank remains under consideration, with the government receiving revised bids from Dubai-based Emirates NBD and Prem Watsa-led Fairfax Financial Holdings following a failed attempt earlier in the year.

The push to accelerate miscellaneous capital receipts comes against the backdrop of expenditure pressures stemming from higher energy and fertiliser import bills, which risk exceeding initial budget estimates. Fixing separate disinvestment targets has been discontinued since the Revised Estimate phase of FY 2023-24, though miscellaneous capital receipts have been budgeted at varying levels in recent years, including ₹30,000 crore for RE 2023-24, ₹33,000 crore for RE 2024-25, ₹33,837 crore for RE 2025-26, and ₹80,000 crore for BE 2026-27.

Historical data indicates variable realizations in past fiscal years. In 2021-22 and 2022-23, actual realizations stood at ₹13,534 crore and ₹35,294 crore against revised estimates of ₹78,000 crore and ₹50,000 crore, respectively. Similarly, in 2019-20 and 2020-21, actual realizations reached ₹50,300 crore and ₹32,886 crore against revised estimates of ₹65,000 crore and ₹32,000 crore.

"Achieving 78 percent of the annual disinvestment and asset monetisation target within just five months reflects a disciplined approach to managing public finances. As fiscal pressures mount from import bills, accelerating capital receipts through strategic stake sales in major PSUs provides crucial fiscal breathing room. However, sustained execution—particularly regarding complex transactions like the IDBI Bank strategic sale—will remain critical to comfortably meeting broader deficit objectives without relying solely on aggressive short-term asset dilution." — Dr. Shishir Gupta, Founder & CEO, StartupLanes