PSU asset monetisation likely to get fillip in Budget FY22

Government's asset monetisation programme involving development and sale of surplus land parcel and other non-core assets of central public sector enterprises (PSEs) is expected to be a big focus of Budget 2021-22 that is constrained to look at various innovative  models to mobilise additional resources amidst a Covid-hit economy.

In tandem with the objective, the Centre may set asset monetisation-related targets for several state-run enterprises including Indian Oil Corp, GAIL, HPCL, NTPC, NHPC, PFC, REC, HAL, RITES and MTNL. The targets would allow execution of the scheme in a  structured manner.

The government will benefit from such an exercise as portion of gains from such sale by PSUs will be recouped to it by way of higher dividend pay-out.

The very asset monetisation and disinvestment have been in the government's plans for long but the plans have been severely delayed, and the pandemic has worsened the situation.

Two of the prime state-run majors put on the block, Air India and BPCL, have witnessed severe delays in their strategic sale processes. Centre has received few Expressions of Interest (EoI) for the energy major Bharat Petroleum Corp Ltd (BPCL) including  that of Vedanta, while Air India reportedly has attracted a initial interest from the Tatas.

The renewed focus on asset monetisation in the next financial year will witness active participation of both NBCC and international property consultants and other consultants selected through a competitive bidding process.

Recently, Finance Minister Nirmala Sitharaman said that the disinvestment process will take off in the next year.

In its budget recommendations to the government, industry body, CII asked the government to go ahead aggressively with the disinvestment process of of both loss-making and a few profit-making PSUs, especially given the fact that the capital markets are  performing well and also explore sale or leasing of government's surplus land.