Achieving disinvestment target will be difficult: Plan panel

New Delhi: The Plan panel today said that meeting the Rs 40,000 crore PSU disinvestment target will be difficult on account of the volatile market conditions.

“I think it will be difficult to achieve the disinvestment target (of Rs 40,000 crore) looking at current market conditions,” Planning Commission Member Saumitra Chaudhuri told reporters on the sidelines of Delhi Economic Conclave.

The government is envisaging mobilising Rs 40,000 crore by selling its stake in public sector undertakings (PSUs) through public offers this fiscal. However, so far it has managed to collect only Rs 1,145 crore from Power Finance

Corporation’s follow-on public offer (FPO).

In its Mid-Year Analysis, 2011-12, tabled in Parliament last week, the government said that meeting the disinvestment target is a “stiff task”.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

Given the volatility in the capital market, against the backdrop of weak global as well as domestic economic situation, the government has not come out with public offers as planned to sell its stake in PSUs, except PFC, this fiscal.

So far this fiscal, receipts from disinvestment and miscellaneous heads are Rs 2,731 crore, as against Rs 2,235 crore in the comparable period last year.

The government is also looking at other options, like buyback of shares by PSUs, to meet the target.

According to sources, the DoD has circulated a Cabinet note to seek views of different ministries to sell government equity through buy-back mode in PSUs.

About a dozen cash-rich units, like Coal India, SAIL, NMDC, ONGC and NTPC, have been identified for the purpose, they added.

The Cabinet Committee on Economic Affairs has also approved disinvestments in SAIL, ONGC, HCL, BHEL and NBCC.

Meanwhile, Chaudhuri said that inflation numbers are expected to moderate from December onwards and fall to around 7 percent by March 2012.

“I think there should be decline (in headline inflation) in December and we would be able to reach what the RBI trajectory is… It is 7 percent as per the monetary policy,” he said.

The overall inflation fell to 9.11 percent in November, lowest in a year. Food inflation also moderated to a near four-year low of 4.35 percent for week ended 3 December.

PTI