IDBI divestment to be pushed to next fiscal; divestment target unlikely to be met

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₹51,000 crore. However, the government expects higher non-tax revenues, including higher dividends from the Reserve Bank of India (RBI) and public sector banks to offset any revenue shortfall and maintain the fiscal deficit target of 5.9% (of the GDP), despite not meeting the divestment target. “The divestment of IDBI bank is unlikely to happen this fiscal.

It is likely to be pushed to the next fiscal," said the first person mentioned above, who requested anonymity. “We are unlikely to achieve the divestment target this year. However, we have offsetting positives in the non-tax revenues front, including higher dividends from RBI and likely higher dividends from banks," the person added.

The RBI had transferred ₹87,416 crore as dividend to the government for FY23. An equity dividend of about ₹13,800 crore was received by the government from the listed public-sector banks (PSBs) during FY23. Interestingly, the government’s divestment target of ₹51,000 crore for FY24 is lower than the previous financial year.

The estimates for FY23 had been revised to ₹50,000 crore from the earlier target of ₹65,000 crore. Earlier, the government had aimed to issue financial bids for IDBI Bank by December 2023 and close the transaction during the fourth quarter of the current fiscal year. Proceeds from the government’s stake sale in IDBI bank was expected to be over ₹15,000 crore.

The financial due diligence process for the purpose had commenced during July. “There is a delay (in the divestment process) but it’s not an unfair delay," said the second person, who spoke under the condition of anonymity. The Finance Ministry didn’t respond to queries.