India is on course to exceed its ₹80,000 crore fundraising goal through state-run company stake sales, buoyed by the largest LIC divestment in years and promising progress on IDBI Bank stake sale, amid ongoing fiscal pressures.
India is on track to beat its full-year goal of raising ₹80,000 crore through sales of stakes in state-run companies and other asset monetisation measures, according to government sources cited by Business Standard. The stronger-than-expected receipts come as officials try to cushion the budget from higher fertiliser import costs and fuel subsidies linked to the West Asia conflict.
The latest boost came from the government’s sale of shares worth ₹31,550 crore in Life Insurance Corporation of India, its largest divestment in years. Alongside stake reductions in companies such as Coal India and Indian Railway Finance Corp, total proceeds have already topped $5.5 billion, the report said.
A key part of the government’s plan is the long-delayed sale of its holding in IDBI Bank, which one source said should still close in this financial year and could add another $2.5 billion. Moneycontrol has previously reported that the IDBI transaction, together with a possible sale in Shipping Corporation of India, is central to the broader disinvestment push, with the government and LIC together holding about 61% of the lender.
Finance Minister Nirmala Sitharaman has also set quarterly collection targets for the disinvestment department, Business Standard reported, as officials increasingly rely on smaller stake sales in listed state companies. Those transactions are easier to complete than full privatisations and carry less political and regulatory risk, after the government’s wider privatisation programme launched in 2021 moved more slowly than planned.
The improved receipts will help, but fiscal pressures remain. India is targeting a deficit of 4.3% of GDP this year, and government data show spending in the April-June quarter rose 11% from a year earlier, with subsidies jumping 37%. N.R. Bhanumurthy of the Madras School of Economics told Business Standard that the government may still need more revenue, particularly after fuel tax cuts, while the Reserve Bank of India’s record dividend transfer and higher payouts from state-run financial institutions have already lifted non-tax income.
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