India’s Disinvestment Strategy in FY25 | 19 Mar 2025

Source: BS 

The Indian government’s disinvestment receipts in FY25 are at their lowest since 2014-15, signaling a strategic shift from aggressive stake sales to optimizing Public Sector Enterprises (PSEs) performance.  

• Disinvestment Receipts: As of FY25, the government has accrued only Rs 9,319 crore (lower than Rs 16,507 crore in FY24) through disinvestment, marking the lowest level since 2014-15 despite post-pandemic economic recovery. 
• Shift in Disinvestment Policy: Since FY24, the government has stopped setting annual disinvestment targets, moving towards a "value creation" approach for PSEs. 
  • The new strategy includes higher capital expenditure, improved dividends, phased market dilution, and strategic privatization where feasible. 
• Disinvestment: It is the government's process of selling its stake in PSEs to raise funds, reduce fiscal burden, and boost private participation. It includes Strategic Disinvestment (full or substantial stake sale with management transfer) and Minority Stake Sale (partial sale without management transfer). 
  • Disinvestment methods include Initial Public Offer for unlisted companies, Further Public Offer for listed ones, Offer for Sale for quick stake dilution, Buyback of Shares to consolidate ownership or utilize surplus cash, and Exchange Traded Funds (ETF). 
  • The disinvestment process is conducted by the Department of Investment and Public Asset Management under the Ministry of Finance.