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BUSINESS EYE JULY 12, 2024 | The Indian Eye 28

Divestment needs concrete roadmap,

Centre should take stance

on PSBs: SBI Research

SBI Research report, authored and led by Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI, expects the
government to clarify the possible stake sale by LIC and the Centre in IDBI Bank, during the upcoming Budget

OUR BUREAU It added that there is a need to
scale up collaboration with global
New Delhi
peers.
sserting that banks are in good In the interim budget tabled in
condition, SBI Research sug- February this year, the 2023-24 di-
Agested that the central gov- vestment estimate was revised down-
ernment should take a stance on the ward to Rs 30,000 crore from the
disinvestment of public sector banks previously budgeted Rs 51,000 crore.
(PSBs). Furthermore, the target for 2024-25
In a comprehensive report put has been set at Rs 50,000 crore.
out by SBI Research, ahead of the Separately, according to a re-
much-awaited full Budget for 2024-25 cent CareEdge Ratings report, there
to be tabled on July 23 - the first Bud- is total divestment potential of ap-
get under Modi 3.0, it asserted that proximately Rs 11.5 trillion at cur-
divestment needs a concrete road- rent market capitalization, assuming
map for attracting capital and confi- the government retains control over
dence in financial institutions (FIs). the company’s governance by main-
Disinvestment or divestment taining at least a 51 per cent stake in
typically refers to the sale by the gov- these public undertaking companies
ernment, partly or fully, of a govern- and divests any excess shares.
ment-owned enterprise. Of this Rs 11.5 trillion divest-
SBI Research report, authored ment potential, public sector enter-
and led by Soumya Kanti Ghosh, Government and Life Insurance Corporation of India are selling an almost 61 per cent prises could contribute around Rs
Group Chief Economic Adviser, SBI, 5 trillion, while public sector banks
expects the government to clarify the stake in IDBI Bank (File photo) and insurance firms could potentially
possible stake sale by LIC and the add another Rs 6.5 trillion, the rating
Centre in IDBI Bank, during the up- of interest for the IDBI Bank stake in digital and IT infrastructure and agency’s report asserted.
coming Budget. on offer,” its report claimed. aligning priority sector lending (PSL) CareEdge believes that the gov-
“Government and Life Insurance Given the complete change framework with priorities. ernment will maintain its target of
Corporation of India are selling an sweeping the PSBs under successive Also, it suggested that the di- divestment (as a miscellaneous cap-
almost 61 per cent stake in IDBI reforms and policy support, the road- vestment targets need to be more ital receipt) at Rs 50,000 crore in the
Bank. They invited bids from buyers map ahead could be to reduce own- realistic without hesitations or delib- upcoming budget to be tabled on
in October 2022. In January 2023, ership stake in PSU banks, greater erations given the maturity of Indian July 23, the same as that given in the
DIPAM received several expressions HR autonomy, further investments banking system. interim Budget. (ANI)

Finance Commission constitutes five-member Advisory Council

he Sixteenth Finance Com- To assist in the preparation of pa- The 16th Finance Commission (53 of 2005), and make appropriate
mission has constituted an pers or research studies and to mon- was constituted by the President on recommendations thereon.
TAdvisory Council with five itor or assess studies commissioned 31st December 2023 with Arvind Pa- According to the 15th Finance
members -- DK Srivastava, Neel- by the Finance Commission, thereby nagariya as Chairman. The commis- Commission’s recommendations, the
kanth Mishra, Poonam Gupta, Pran- enhancing the Commission’s under- sion has been constituted to make rec- centre should allocate 41 per cent of
jul Bhandari, and Rahul Bajoria. standing of the issues in its ToR. ommendations covering a period of tax collection to states. This is known
Poonam Gupta shall be the To help broaden the Commis- five years commencing on April 1, 2026. as vertical devolution. The distri-
Convenor of the Advisory Council. sion’s ambit and understanding by Additionally, the commission is bution among states, or horizontal
The role and functions of the seeking the best national and interna- also mandated to review the present devolution, is based on several crite-
Advisory Council will be to advise tional practices on matters pertaining arrangements for financing Disaster ria like demographic performance,
the Commission on any of the Terms to fiscal devolution and improving the Management initiatives, with refer- Income, population, area, forest and
of Reference (ToR) or related sub- quality, reach, and enforcement of its ence to the funds constituted under ecology, tax and measures to check
jects that may be of relevance. recommendations. the Disaster Management Act, 2005 fiscal deficit by individual states.

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