MODI GOVERNMENT - REPORT CARD (2/2)

A report based on the study by Deccan Herald. Report Card is of

the early stages of his Term

Disinvestment

The government claims to have not only reached its disinvestment target of Rs 80,000 crore for FY19 but of having surpassed it by Rs 5,000 crore. However, it managed to do so not by 'disinvestment' proper but by getting one PSU to buy equity in another. This was the case when Rural Electrification Corporation acquired nearly 53% of Power Finance Corporation, and the government made a neat Rs 14,500 crore; or when ONGC bought the government's stake in HPCL for Rs 37,000 crore. The government managed to list only five companies in FY19, garnering a paltry Rs 2,000 crore. It also raised Rs 8,000 crore from share buybacks by PSUs. The big failure was the bid to privatize Air India.

Banking-Reforms

The government started on the right path with aggressive recognition of NPAs and clean-up of balance sheets. It announced management reforms to be undertaken in the sector, such as hiring professionals laterally at least in five large banks. By early 2016, the Banks Board Bureau (BBB) was in place to recommend banking reforms. But the recommendations of BBB were not implemented and the reforms lost steam. The government did infuse much-needed capital of Rs 2 lakh crore into banks after kicking the can along for some time. But in the absence of reforms, the question is, is good money being thrown after bad?

Petrol Prices

The government's tax collections on petrol and diesel have jumped over 300 per cent in the last six years as excise duty on the two fuels was hiked, Lok Sabha was informed on Monday. The collections on petrol and diesel rose to Rs 2.94 lakh crore in the first 10 months of the current fiscal (2020-21), Minister of State (MoS) Finance Anurag Thakur said in a written reply in Lok Sabha. The fuel prices are generally revised on a daily basis in line with benchmark international price and foreign exchange rates.