Budget Expectations: Tax and Non-Tax Revenue to Make up for Disinvestment Shortfall

24 Jan 2024 , 03:09 PM

According to CareEdge, despite the Union Budget allocating Rs 510 billion for disinvestments in the fiscal year 2024, the latest data from the Department of Investment and Public Asset Management (DIPAM) indicates that the government has only achieved Rs 100.5 billion through disinvestments thus far. With upcoming elections and the imminent implementation of the Model Code of Conduct (MCC) just months away, the scope for significant progress in major divestment initiatives seems limited. 

Consequently, CareEdge FY24 divestment projection is approximately Rs 150 billion. The anticipated significant divestment involving IDBI Bank planned for this year now appears uncertain. Previous efforts to divest from BPCL and Pawan Hans were unsuccessful, and stake sales in the Shipping Corporation of India are currently impeded by the demerger of land assets. The expected Rs 360 billion shortfall in non-debt capital receipts due to slow progress on divestment is predicted to be offset by better-than-budgeted performance in tax and non-tax revenues.