Government has exceeded the disinvestment target of Rs 80,000 crore set for the Financial Year 2019,which ends in March.Disinvestments have touched ₹85,000 crore which is Rs 5,000 crore more than the set target.The next financial year’s disinvestment target has been set at Rs 90,000 crore.
The government was able to reach its target after it raised Rs 14,500 crore after state-run Power Finance Corporation(PFC) acquired shares of Rural Electrification Corporation (REC).Further,it earned up to Rs 9,500 crore from the fifth tranche of CPSE ETF.
CPSE Exchange Traded Fund is a fund created by government to sell the shares in PSUs.The CPSE ETF is managed by Reliance Nippon Life Mutual Fund.It comprises shares of the 11 public sector undertaking companies.
Exchange Traded Funds (ETF) are index funds that are listed and traded on stock exchanges just like regular shares.The ETF is aimed at helping speed up the government’s disinvestment programme.
Disinvestment means selling of assets.In the case of Public Sector Undertakings, disinvestment means Government selling/ diluting its stake (share) in PSUs in which it has a majority holding.Disinvestment is carried out as a budgetary exercise,under which the government announces yearly targets for disinvestment for selected PSUs.
In April 2016,the Department of Disinvestment (under Ministry of Finance) was renamed as Department of Investment and Public Asset Management (DIPAM). The mandate of the Department is as follows:(a)All matters relating to the management of Central Government investments in equity including disinvestment of equity in Central Public Sector Undertakings and (b)All matters relating to the sale of Central Government equity through offer for sale or private placement or any other mode in the erstwhile Central Public Sector Undertakings.