Exuding confidence that the divestment target of the centre of Rs. 1.75 trillion is highly achievable, the country's CEA K V Subramanian on Saturday said that the planned IPO of LIC could itself fetch Rs. 1 trillion.
Also he iterated that inflation targeting by the apex bank has help in taming the volatility as well as inflation levels. Until March 31, 2021, the RBI's MPC has mandated to keep annual inflation at 4 percent, with an upper tolerance level of 6 percent and lower limit of 2 percent.
Subramniam speaking at a virtual session organized by Jana Small Finance Bank said the divestment of Rs. 1.75 trillion is actually a carryover of the Rs. 2.1 trillion set for the current FY. "Of this, BPCL privatisation and LIC listing itself were important contributors.
There are estimates suggesting Rs 75,000-80,000 crore or even higher can just come from the privatisation of BPCL itself. LIC IPO could bring in Rs 1 trillion approximately," he said.
In the country's privatization drive, the centre is offloading its entire stake of 52.98% in state-run oil retailing firm BPCL. The firms that have shown interest to take over government's stake include Vedanta Group and PE firm Apollo Global and I Squared Capital's Indian unit Think Gas.
Earlier this week, the amendments in the LIC Act via the Finance Bill 2021 have already been approved. "These are numbers (disinvestment) which are imminently achievable because the work had begun on many of these and they will be completed in FY'22," he said.
Also he stressed that India needs more banks in order to meet its growth potential. As an example he said the US which has one third population in comparison to India has around 25000-30000 banks.
On the long term growth story, he said in the next FY, India can realize double digit growth.