Disinvestment in Budget 2025-26: Miscellaneous Capital Receipts
Why in the news
Union Budget 2025-26 changed how capital receipts are shown. Rather than a separate disinvestment target, it now groups privatisation, asset monetisation and stake sales under “miscellaneous capital receipts”.
Key facts
- Target: ₹47,000 crore for miscellaneous capital receipts, matching last year despite repeated misses.
- FY 2024-25: stake sales such as GIC of India raised under ₹10,000 crore, so the full-year goal looks out of reach.
- Last major deals: Air India and Neelachal Ispat, both in 2022.
- 2021 policy: the Government had promised to limit state enterprises to four strategic sectors and close or privatise the rest, but privatisation has stalled without public explanation; IDBI Bank’s sale is in limbo.
- Reverse move: an ₹11,500 crore revival package for RINL (Visakhapatnam Steel Plant, liabilities over ₹35,000 crore) instead of a sale.
- Fiscal squeeze: the Budget cut personal income tax revenue by ₹1 trillion while capex grows more slowly, making asset sales more important.
Past disinvestment targets
| Year | Target |
|---|---|
| 2019-20 | ₹1.05 trillion |
| 2020-21 | ₹2.1 trillion |
| 2021-22 | ₹1.75 trillion |
None was met, even though public sector valuations rose.
About disinvestment
Disinvestment means an organisation or government selling or liquidating assets, subsidiaries or business units. Reasons: sharper strategic focus, freeing capital to reduce debt or fund better ventures, and environmental or political motives.
| Type | Meaning |
|---|---|
| Minority disinvestment | Government keeps a majority (usually over 51%) |
| Majority disinvestment | Majority stake sold to private investors |
| Complete privatisation | Entire enterprise sold |
Methods
- Institutional placement: stake sold to financial institutions.
- ETFs: equity in several companies sold through exchange traded funds.
- Cross-holding: listed PSUs buy government stakes in other PSUs.
Exam angle
- New head: miscellaneous capital receipts (₹47,000 crore).
- Stuck sale: IDBI Bank; revival: RINL.