Comparing extrapolations from past to present, and from present to future, is at best confusing.
The combination of strong disinvestment proceeds so far (and more in the pipeline) and the 3G license auction has the potential to significantly lower the fiscal deficit: More than Rs 25,000 cr ($5.5 billion) from disinvestment this year
Disinvestment proceeds of the government could be higher than the estimate of Rs 25,000 crore for 2009-10. The government has already raised Rs 13,621 crore through disinvestment in four public sector companies.'The 3G money raised may be more than estimated'
Dilution of stake in National Mineral Development Corporation (NMDC), the fifth public sector undertaking to come out with a public offer this year, is likely to fetch the government more than the remaining Rs 11,388 crore, thereby exceeding even the revised target for the current year.
Even if the issue price for NMDC is set at Rs 405 a share (a discount of 7 per cent at the current market price), the issue would be able to raise Rs 13,365 crore, which is slightly less than Rs 13,621 crore raised through the other four issues this year.
The original budgetary target for disinvestment was Rs 1,120 crore for 2009-10. A senior official in the Department of Disinvestment said the government earned Rs 882.51 crore from Rural Electrification Corporation (REC) issue and Rs 8,480 crore from National Thermal Power Corporation (NTPC) follow-on offer. “The figures for the two companies have been finalised after issue of shares,” said the official.
The government raised Rs 2,012 crore through dilution of equity in National Hydro Power Corporation (NHPC) and Rs 2,247 crore from stake sale in Oil India Ltd (OIL). Besides, it got interest income of Rs 5.25 crore from NTPC issue and Rs 1.25 crore from REC.
The NMDC follow-on offer will open on March 10. The issue price will be decided by an Empowered Group of Ministers (eGoM) on March 8. The issue will hit the market with over 33 crore equity shares of face value Re 1 each. The money will be raised through a book building process.
The Budget’s deficit reduction plan largely hinges on 3G licence auctions and disinvestment, which add up to around Rs 75,000 crore, or about 1.1 per cent of GDP. There are views in the telecom industry that the 3G licence revenues may not be as much as has been estimated. What is the basis on which you came to this number?
Our understanding is, and this is not just from the telecom ministry but some segments of the industry, that Rs 35,000 crore are in fact probably on the lower and conservative side. That is the perception the telecom industry has. This is an open auction. We will see the results in a month and a half. The perception is that the actual amount of money we are getting from 17 circles, where four blocks would be auctioned, may be even higher than what we have estimated.
How much more?
Well, one estimate given to me was Rs 45,000 crore. But, you know these are all numbers up in the air and we cannot be sure until the auctions take place. Similarly, on the disinvestment side, I would not like to say that the number has been pitched low. But, if you see from what has happened in the last five-six months after the disinvestment process or the sale of equity to the people started in September, we are getting Rs 25,000 crore. Once the momentum is built, Rs 40,000 crore are not a difficult or an unachievable target. So, as far as the numbers go, I do not think there is any cause for anxiety at this stage over whether these numbers would actually be reached or not.
Mechanism Current_Est Max_Est
Disinvestment Rs.25000cr/$5.5B Rs.40000cr/$8.7B
3G License Rs.75000cr/$16.4B Rs.120000cr/$26.2B
Total Rs.100000cr/$21.9B Rs.160000cr/$34.9BDirect tax collections up 7.5% till February
Direct tax collections in the first 11 months (April-February) of the current financial year rose 7.52 per cent to Rs 2,78,373 crore, compared with Rs 2,58,902 crore in the corresponding period of 2008-09.
The revenue department will have to collect Rs 91,627 crore in March to meet its revised Budget target of Rs 3.87 lakh crore for 2009-10.
Corporate tax collections grew by 10.89 per cent to Rs 1,80,318 crore, against Rs 1,62,617 crore in the same period of the previous financial year. Receipts from personal income tax —including Securities Transaction Tax (STT), residual Fringe Benefit Tax (FBT) and Banking Cash Transaction Tax (BCTT) — grew 1.84 per cent to Rs 97,692 crore, against Rs 95,930 crore in the year-ago period.
Direct tax collections in February grew 27.54 per cent to Rs 14,675 crore, compared with Rs 11,506 crore in the same month last year. In January, however, the tax collections had fallen 19.84 per cent.
While corporate tax receipts grew 16.87 per cent in February, personal income tax collections increased 37.58 per cent.