Disinvestment plan key to avert revenue slippages in FY 20: ICRA

New Delhi: The speed with which government’s disinvestment programme kicks off as well as interest shown by potential buyers in public sector units being offered for strategic sale will be crucial to prevent a slippage in non-loan capital receipts, according to investment information and rating agency ICRA.
Finance Minister Nirmala Sitharaman on Friday increased the disinvestment target to Rs 1.05 lakh crore for financial year 2019-20, over 16 per cent from the interim Budget target. She said strategic disinvestment of select central public sector enterprises like Air India will continue to remain a priority for the government.
The revised Budget estimates for FY 20 indicate a rise in fiscal deficit at an absolute level to Rs 7 lakh crore from Rs 6.6 lakh crore in FY 2019. However, the government has forecast a mild dip in fiscal deficit target to 3.3 per cent of GDP in FY 20 from 3.4 per cent of GDP in FY 19.
ICRA said the revenue receipts are estimated to grow by 25.6 per cent with a considerable 25.3 per cent rise in net tax revenues and a significant 27.2 per cent expansion in non-tax revenues.
The revised Budget estimate for FY 20 has projected an increase of 27.2 per cent in non-tax revenues to Rs 3.1 lakh crore from Rs 2.5 lakh crore in FY 19. Revenues from communication services are estimated to increase to Rs 50,519 crore in FY 20 from Rs 39,245 crore in the previous fiscal.
Assuming no spectrum auctions, ICRA’s estimate for non-tax revenue from telecom receipts in FY 20 is Rs 39,000 crore to 41,000 crore, based on the deferred payments pertaining to earlier auctions and normal fees such as spectrum usage charges and licence fees.