The target of mopping up Rs 1.75 lakh crore from divestments of some of the public sector companies, including LIC and BPCL during the current fiscal, is on track and groundwork is being prepared for the goal, Chief Economic Advisor Krishnamurthy Subramanian said on Monday.
On the COVID-19 pandemic, Subramanian said the impact of the second wave is lesser than that of the first one.
In an interactive session, organised by Federation of Telangana Chambers of Commerce and Industry, the CEA said robust GST collections, over Rs one lakh crore per month for eight months in a row shows that consumption is picking up indicating positive signal for growth.
"There has to be a lot of work which is going on and this year there is actually a lot of emphasis on achieving these targets.Remember that Rs 1.75 lakh crore, a good part of it will be from LIC's IPO (Initial Public Offering). second is Bharat Petroleum (BPCL) privatisation.
"And these two together itself can account for a large part of (divestment target)," he said.
The Centre budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, in the current fiscal year.
The divestment plan includes strategic sale of IDBI Bank, BPCL, Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, among others, and also legislative amendments required for LIC IPO would be brought in 2021-22, Finance Minister Nirmala Sitharaman had said in her Budget speech.
"I think this year very likely will be the year of which will be remembered for privatisation. We still have nine more months.I am quite confident that we will achieve the target (of Rs 1.75 lakh crore )," the CEA said replying to a query.
Earlier in his speech, he said every rupee spent by governments on "freebees" would contribute only Rs 0.98 to the country's economy against Rs 4.50 when used on capital expenditure.
