Raising the fiscal balance is very important for the government to raise revenue. Moreover, due to the slow pace of tax revenue, the government has now increased its confidence in disinvestment. The government has set a major target of Rs 210000 crore for the financial year 2020-21. In this direction, the government has decided to sell a part of its stake in LIC through IPO in the stock market and sell the remaining equity in IDBI. The same Union Finance Minister Nirmala Sitharaman, while presenting the general budget for the coming financial year on Saturday, announced that LIC was announced to be listed on the stock market. The Finance Minister said that being listed on the stock market means disciplining the company.
Along with this, companies have access to financial markets and their true value emerges. Listing of LIC in the stock market gives retail investors the opportunity to participate in the company which creates wealth. Listing Government LIC It will sell some of its stake through the stock market. At present, the Finance Minister has not made it clear in his budget speech at present how much equity stake of the government will be sold in LIC. Now the government has 100% stake in LIC. The disinvestment of LIC is significant in that it invests heavily in all the companies listed on the stock market.
It occupies an important place in the domestic financial institutions investing in the stock market. Further, referring to efforts to strengthen the banking system, the Finance Minister has also announced in the budget to sell his remaining stake in IDBI Bank. Last year, the government sold 51% of its stake in IDBI Bank to LIC. The government currently holds 4.11 percent stake in the already listed IDBI Bank in the same stock market. The same government plans to sell its stake in IDBI Bank to private, retail and institutional investors. The government's revenue receipts have been slow in the current financial year. Because of this, the government has not kept a very big target in the budget for the next financial year. That is why the government is relying more on non-tax revenue for revenue. Under this, disinvestment will be in a big role. Apart from this, the government has expressed its intention to raise Rs 210000 crore from disinvestment in the coming financial year.
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