The 8 years of the Modi government account for a total of 72% of revenue earned through the disinvestment of government-owned assets, reported The Print.
From time to time, Prime Minister Narendra Modi has reiterated his vision of pulling the government out of businesses that it had ventured into during the ‘socialist era.’
Having realised the need to get rid of loss-making assets, which are funded by taxpayers’ money, the government accelerated the disinvestment process during his tenure.
The recent data analysis by The Print reveals how the BJP government at the Centre has been firm in its commitment towards disinvestment. The news outlet assumed average year-on-year inflation to be 6% and based its analysis on data sourced from RBI and the Department of Investment and Public Asset Management (DIPAM).
According to The Print, the proceeds from disinvestment collected post-2014 amounted to 72% of all revenue accrued since 1991. When inflation was factored in (at an average annual rate of 6%), the Modi era still accounted for 57% of disinvestment revenue.
Disinvestment of government-owned assets began during the reign of P. V. Narasimha Rao. The Print reported that about ₹17557 crores (₹91,800 crores in today’s value) were earned between 1991-1999.
Disinvestment received a major boost during the tenure of late Prime Minister Atal Bihari Vajpayee (1998-2004). A total of ₹27,599 crores (about ₹93,300 crores in today’s value) were collected through the sale of government-run businesses during that period.
According to The Print, the Congress-led UPA-I government (2004-2009) could raise only ₹11,591 crores (₹32,000 crores in today’s value) through disinvestments due to its post-poll alliance with Left parties.
When the alliance fell apart over the infamous India–United States Civil Nuclear Agreement in 2008, the disinvestment process got a new breather and raised ₹1.2 lakh crore (or ₹2.4 lakh crore in today’s value) during UPA-II (2009-2014).
In comparison to UPA-II, the Modi government generated a whopping ₹3.2 lakh crore (or ₹4.7 lakh crore in today’s value) in its first term. The Print reported that the Covid-19 pandemic affected the momentum of disinvestment of government-run businesses.
Between 2019 and September 2022 (including the two years of the pandemic), the disinvestment process generated about ₹1.26 lakh crore (₹1.48 lakh crore in today’s value). It implies that the Modi government raised a total of ₹6.19 lakh crore (adjusted for inflation) through this route during the past 8 years.
Reportedly, disinvestment serves three important purposes – helps in balancing the fiscal deficit, opens new market opportunities for price sectors, and ensures fair compensation to the government for the sale of its assets.
#FlyAI : Press Release : Tata Group Onboards Air India. pic.twitter.com/EO83xfJhZM
— Air India (@airindiain) January 27, 2022
Recently, the Modi government concluded the successful disinvestment of Air India. In a press statement, Tata Group said that it would like to acknowledge Prime Minister Narendra Modi’s commitment to reforms and faith in India’s entrepreneurship spirit, which made this historic transaction possible.
“Our Prime Minister has in action demonstrated what his commitment to ‘Minimum Government, Maximum Governance’ means,” added the company.
According to The Print, the government has put forth a disinvestment target of ₹65000 crores for FY 2022-2023 (out of which ₹24,544 crores has already been achieved). This is a conservative target, judging from the 8-year track record of the Modi government.
Gradually, the government is planning to rid itself of loss-making assets and maintain a ‘minimum presence’ in strategic sectors such as atomic energy, space, defence, transport, telecommunications, power, petroleum, coal, and financial services.
