Govt Expecting Rs 1 Lakh Crore From LIC IPO; Rs 80,000 Crore By Selling Bharat Petroleum To Private Firms
On Saturday, Chief Economic Adviser (CEA) K V Subramanian said that the proposed initial public offering (IPO) by LIC itself could garner ?1 lakh crore for the government and in the light of same the disinvestment target of ?1.75 lakh crore for this fiscal year is “imminently achievable”.
He added that volatility as well as inflation has been brought down by Reserve Bank of India (RBI) through retail inflation targeting.
It has been mandated to maintain annual inflation at 4 per cent until March 31, 2021 by RBI’s Monetary Policy Committee. An upper tolerance of 6 per cent and lower limit of 2 per cent has been directed.
The disinvestment target of ?1.75 lakh crore for 2021-22, according to Subramanian, is a carryover of the ?2.10 lakh crore target set for the current fiscal ending March 31.
Govt To Rope In 1 Lakh Crore through LIC & 80000 Crore through BPCL
He said that BPCL privatisation and LIC listing are important contributors as LIC IPO could bring in ?1 lakh crore approximately and ?75,000-80,000 crore or even higher can just come from the privatisation of BPCL.
In what is the biggest privatisation till date, government is selling its entire 52.98 per cent stake in BPCL. Expression of interest have been put forth by Vedanta Group and private equity firms Apollo Global and I Squared Capital’s Indian unit Think Gas for buying the government’s stake.
Earlier this week, in regards to the LIC listing the government has already got amendments in the LIC Act passed through Finance Bill 2021 in Parliament. Work on privatization will be completed in FY’22 and the target is imminently achievable, he added.
Government Has No Business To Be In Business: PM Modi
Barring the bare minimum presence in four strategic sectors, PM Modi last month said that the government has no business to be in business and his administration is committed to privatizing all PSUs.
Subramanian, on speaking on the banking system, said that more banks are needed so as to meet the growth potential and has cited the example of America for the same. America, which has one third the population of India has about 25,000-30,000 banks.
He said, while speaking on the long term growth story of India, the economy is expected to record double digit growth next financial year. Next year, it could moderate to 6.5-7 per cent post which we can expect a growth rate of 7.5-8 per cent which shall be aided by the recent reform measures announced by the government.