The union government is going to meet its annual disinvestment target for the first time this fiscal year after Oil and Natural Gas Corporation (ONGC) declared its decision to purchase the majority stake in Hindustan Petroleum Corporation Ltd. (HPCL) for Rs. 36,915 crore.
Once the deal is completed by the end of this month, the central government’s entire share of 51% in HPCL will be transferred to state-owned ONGC, making it a gigantic integrated oil conglomerate.
This transaction will help the government earn a total of Rs. 91,253 crore in disinvestment receipts this year, which is much higher than the disinvestment target of Rs. 72,500 crore in FY-2018 announced by Finance Minister Arun Jaitley during last February’s annual budget.
The news comes at a particularly good time for the government as it will enable it to curb fiscal deficit to 3.2% of the GDP ahead of next month’s budget. This revenue raised from stake sale is also seen as a much-needed breather to the central treasury, which had taken a hit this year following the introduction of GST in July.
Arun Jaitley’s Finance Ministry is expected to further increase disinvestment targets for FY-2019 in the upcoming budget session with companies like Air India likely to be given priority for the same. The Union Cabinet has already given its nod for strategic sale and IPOs in many other-state owned PSUs, including Pawan Hans, HLL Life Care and Central Electronics Ltd.