The Indian government has so far collected ₹8,625 crore through various minority stake sale disinvestment transactions during the current financial year 2024-25, according to MoS Finance Pankaj Chaudhary in a written reply to the Lok Sabha. While no specific disinvestment target has been set for FY25, the government continues its policy of strategic disinvestment and privatization, aiming to enhance efficiency and economic potential in sectors where competitive markets have matured.
Key Highlights of Disinvestments
₹8,625 Crore Realized
- The government earned ₹8,625 crore through minority stake sales in FY25 so far.
No Disinvestment Target for FY25
- Starting 2023-24 (RE), the government discontinued setting separate disinvestment targets.
- For FY25, no estimate or target for disinvestment has been specified.
Methods of Disinvestment
- Minority Stake Sale: Selling a smaller portion of government-held shares in public sector enterprises.
- Strategic Disinvestment: Sale of substantial or entire government shareholding along with transfer of management control.
Privatization vs Strategic Disinvestment
- Privatization: Government equity and management control are transferred to private strategic buyers.
- Strategic Disinvestment: Transfer of government equity and control to another CPSE or private investor.
Government’s Strategic Policy
- The policy aims to exit sectors where competitive markets have matured.
- Privatization or strategic disinvestment allows,
- Infusion of Capital
- Technological Upgradation
- Efficient Management Practices
Disinvestment Process and Challenges
Execution depends on several factors
- Market Conditions
- Economic Outlook (Domestic & Global)
Geopolitical Factors
- Investor Interest
- Administrative Feasibility
Strategic Disinvestment Approvals Since 2016
- The government has given ‘in-principle’ approval for strategic disinvestment in 36 cases of PSEs and/or their subsidiaries, units, joint ventures, and banks.
Profitability Not a Criterion
- Profitability or losses of PSEs are not relevant criteria for privatization or disinvestment decisions.
| Summary/Static | Details |
| Why in the news? | Centre Earns ₹8,625 Crore via Disinvestment in 2024-25 |
| Disinvestment Target for FY25 | No specific target or estimate for FY25. |
| Disinvestment Methods | – Minority Stake Sale
– Strategic Disinvestment (sale of substantial government shareholding with management transfer) |
| Privatization vs Strategic Disinvestment | – Privatization: Transfer of equity and control to private buyers.
– Strategic Disinvestment: Transfer to CPSEs or private investors. |
| Policy Focus | Exit from sectors where competitive markets have matured; focus on,
Capital infusion Technological upgrades Efficient management practices |
| Strategic Disinvestment Approvals | 36 cases approved since 2016 (PSEs, subsidiaries, joint ventures, banks). |
| Profitability in Disinvestment | Not a relevant criterion for privatization or strategic disinvestment. |
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