India’s efforts to privatise refiner Bharat Petroleum Corp. Ltd. could spill over into the next fiscal year, according to a government document and sources, hurting New Delhi’s efforts to rein in a ballooning fiscal deficit.
The privatisation of key companies, including BPCL, is a key part of government plans to pare the fiscal deficit, which has breached its target level just four months into the current fiscal year. Industry sources last year estimated the government’s 53.29% stake in BPCL could fetch $8 billion to $10 billion.
With India’s economy contracting by a record 23.9% in the June quarter due to COVID-19, a delayed sale of BPCL could hinder the government’s ability to generate funds for stimulus efforts aimed at restoring growth.
New Delhi’s plan to sell its stake in BPCL was first announced in November 2019, and is part of a broader program to spin off or sell stakes in dozens of state-owned companies.