Govt may target $7.4 b from stake sales in budget

New Delhi: The government is likely to target Rs 400 billion in proceeds from stake sales in state-run companies in the next fiscal year, a finance ministry official with direct knowledge of budget talks told Reuters on Wednesday.

The official also said the government is likely to allocate Rs 200 billion for capital infusions into state-run banks in the next financial year, up from Rs 150 billion set aside for bank recapitalisation in the current year. The revenue target from a partial privatisation of state-run companies is higher than the Rs 300 billion New Delhi is aiming for in the current fiscal year that ends in March.

With less than two months to go before the year closes, the government has managed to raise 70 percent of the targeted amount, and officials in the government concede that the final figures for this year could fall shy of the target. The struggle to meet the current year's target had made many investment bankers believe that the government would likely budget at least Rs 300 billion for next fiscal year as well.

But a resource crunch has forced New Delhi to aim higher, said the official, who declined to be identified because he was not authorised to speak about the budget, to be released on February 28. "The aim is to maximise your revenue options. Low growth has constrained our resources," the official said. The government is still to finalise the target, he said.