IDBI Bank Sale Set to Push Centre Past Its ₹80,000 Crore Disinvestment Target, a First Since FY19

Disinvestment means the government selling some or all of its shares in a company it owns, called a Public Sector Enterprise (PSE) or Public Sector Undertaking (PSU). If it sells a small part and keeps control, it is a minority stake sale. If it sells a big part along with management control, it is a strategic sale (often called privatisation). The money raised helps the government pay for its spending without borrowing more.

A Development Financial Institution (DFI) is a special lender that gives long-term loans, often for 10 to 30 years, for big projects like factories, power plants and highways. Normal banks find this hard because their money comes from people's deposits, which can be withdrawn at short notice. After 1991, most of India's old DFIs, such as ICICI and IDBI, were turned into commercial banks. IDBI Bank is one of these.

Every rupee the government spends is either revenue expenditure (day-to-day running costs like salaries, pensions, interest and subsidies, which create no lasting asset) or capital expenditure (spending that creates assets like roads and railways, or reduces liabilities, such as repaying loans). In the same way, the money it receives is split into revenue receipts (taxes and non-tax income like dividends) and capital receipts (borrowings, loan recoveries and disinvestment). This split, required by Article 112 of the Constitution, helps show whether the government is building assets or only meeting running costs.