New Delhi: India’s plan to sell $14.7 billion of government-owned assets to plug its budget deficit is seen falling short by nearly half, according to people familiar with the matter.
Receipts from disinvestment in the year to March are expected to be between 500 billion rupees ($7 billion) and 600 billion rupees against the target of 1.05 trillion rupees, the people said, asking not to be identified as the numbers are in the process of being finalized. Complex sale process for some of the assets means the government will run out of time this year, they said.
A spokesman for the Finance Ministry wasn’t immediately available for a comment.
The shortfall will add to the financial problems of the treasury, which is already grappling with lower-than-expected tax collections. The revenue crunch amid an economic slowdown is putting pressure on the budget, with a senior official seeing the fiscal deficit widening to 3.8% of gross domestic product in the current fiscal year against the 3.3% target.
The government will try to push through sale of minority stakes, including through exchange-traded funds, to raise revenue, the people said.
India has achieved only about 17% of the disinvestment target so far this year, while tax collections are 46% of the budgeted aim in the eight months to November. The income shortfall in the current fiscal year would be 4 trillion rupees, ET Now television reported, citing government sources it didn’t identify.
In the absence of a steady revenue stream, authorities have withheld some payments to states and have capped ministries’ expenditure.
Finance Minister Nirmala Sitharaman has refused to comment on the deficit goal before the official budget presentation scheduled for Feb. 1, when she will also present the revised revenue and expenditure statement.- Bloomberg