NEW DELHI: The Centre has raised nearly ₹20,000 crore through disinvestment and asset monetisation in the first two months of the current financial year, achieving around 25% of its annual target as it seeks additional non-tax revenue amid growing fiscal pressures triggered by the conflict in West Asia.
The government’s accelerated fund-raising efforts come at a time when rising global commodity prices and supply chain disruptions are expected to significantly increase subsidy requirements, particularly in the fertiliser and energy sectors.
According to officials, the fertiliser ministry has already sought a substantial increase in the fertiliser subsidy allocation for the current fiscal year. The subsidy was budgeted at ₹1.7 lakh crore, but higher global prices, uncertainty over shipping availability, and reduced participation from international suppliers are expected to drive costs upward. The government has also urged domestic manufacturers to expand production to reduce dependence on imports.
The oil sector is placing additional strain on government finances. The Centre has already extended support exceeding ₹1.2 lakh crore through measures including excise duty reductions aimed at cushioning consumers from elevated crude oil prices. Public sector oil marketing companies have also increased fuel prices, and further phased hikes remain a possibility if international prices remain elevated.
Meanwhile, the government may be required to provide additional support for cooking gas subsidies, as oil companies are reportedly incurring losses of around ₹700 crore per day under current market conditions.
Despite these pressures, government officials have indicated that there is no immediate plan to cut expenditure or seek parliamentary approval for additional spending during the upcoming Monsoon Session. A senior official said the government had already accounted for global uncertainties while framing the Union Budget and therefore sees no need to revise spending plans at this stage.
Officials expect a clearer assessment of the fiscal situation by mid-July, when first-quarter revenue and expenditure data become available. Until then, the government is focusing on strengthening revenues through asset sales and stake divestments.
The Department of Investment and Public Asset Management (DIPAM), along with the Department of Public Enterprises, is actively pursuing a pipeline of disinvestment and asset monetisation initiatives designed not only for the current fiscal year but also for the medium term.
So far, the government has mobilised ₹12,166 crore through disinvestment transactions and another ₹6,367 crore through asset monetisation programmes. Recent disinvestment proceeds have been generated primarily through offer-for-sale transactions involving public sector enterprises including Central Bank of India, Coal India, and NHPC.
Further gains are expected from the government’s decision to divest up to a 3% stake in NLC India. The issue witnessed strong investor interest, with subscriptions reaching 5.2 times the offered shares on the opening day. The transaction is expected to generate approximately ₹1,260 crore for the exchequer.
However, progress on larger strategic disinvestment initiatives remains slow. Apart from the proposed sale of the government’s stake in IDBI Bank, where the process continues to face uncertainties, most strategic sale proposals have seen limited advancement.
Finance Minister Nirmala Sitharaman is closely monitoring the evolving fiscal situation as the government balances rising subsidy obligations with its commitment to maintaining fiscal discipline. With global geopolitical tensions continuing to affect energy and commodity markets, disinvestment and asset monetisation are expected to remain key components of the Centre’s resource mobilisation strategy in the months ahead.
