Disinvestment
The government selling part or all of its ownership stake in public sector companies, either to raise money or to exit businesses it no longer needs to run.
Explain it like I'm 10
Picture a family that owns a small shop it inherited generations ago but no longer has the time or expertise to run well — they can sell part of their stake to a partner who'll manage it better, or sell the whole thing outright and use the money for something else. The government does the same with the companies it owns — Public Sector Undertakings (PSUs) — selling shares on the stock market, selling a strategic stake to another owner, or exiting entirely, and using the proceeds to fund its budget or reduce borrowing.
The formula
Disinvestment Proceeds = Money raised from selling government stakes
in Public Sector Undertakings (PSUs)
FY24 actual = ₹16,507 crore (against a ₹65,000 crore target)
FY25 actual = ₹10,163 crore
FY26 actual = ₹16,886 crore (disinvestment) / ₹45,306 crore
(combined with asset monetisation, beating the RE target)
FY27 target = ₹80,000 crore (miscellaneous capital receipts)Historical data
Since FY24, the Budget no longer reports disinvestment as a standalone line item, folding it into a broader "miscellaneous capital receipts" category alongside asset monetisation — itself a sign of how routinely the standalone disinvestment target has been missed.
Who calculates it
The Department of Investment and Public Asset Management (DIPAM), under the Ministry of Finance, manages the government's PSU stake sales and sets annual disinvestment targets as part of the Union Budget.
Where this number can mislead you
- ⚠Disinvestment targets have been missed far more often than met — actual proceeds have repeatedly landed well below the originally budgeted figure, making the Budget-day target a weak predictor of the year's actual outcome.
- ⚠Timing a stake sale to market conditions means proceeds can swing heavily with stock market sentiment, independent of anything about the underlying PSU's performance.
- ⚠Since FY24, disinvestment is no longer reported as a separate line item in the Budget, being folded into a broader "miscellaneous capital receipts" category — reducing the transparency and year-on-year comparability of the specific disinvestment number.
- ⚠Using disinvestment proceeds to plug the fiscal deficit is a one-off fix — once a stake is sold, that particular source of revenue doesn't recur the following year, unlike a durable tax-base improvement.
Reality check
The government's FY26 disinvestment and asset-monetisation proceeds of ₹45,306 crore beat its own downwardly revised estimate — but that revision itself, from an original ₹47,000 crore budget target down to roughly ₹34,000 crore, illustrates the pattern of disinvestment ambitions being scaled back through the year almost as routinely as they're announced each February.
Test yourself
What is Disinvestment?