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The Plan panel on Thursday 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 looking at current market conditions,” Planning Commission Member, Mr 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“.
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 buyback 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, Mr Chaudhuri said that inflation numbers are expected to moderate from December onwards and fall to around 7 per cent 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 per cent as per the monetary policy,” he said.
The overall inflation fell to 9.11 per cent in November, lowest in a year. Food inflation also moderated to a near four year low of 4.35 per cent for week ended December 3.
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