The Department of Disinvestment is keen on having a less ambitious fundraising target of about ₹35,000-40,000 crore, through stake sales in public sector units, for 2016-17.

“Rather than consistently underperforming on the targets, there is a view that it would be better to have a more realistic and achievable one. The Department can always pleasantly surprise by exceeding the target later in the year,” said a person close to the development.

For 2015-16, the Union Budget had set a target of ₹69,500 crore from PSU stake sales (₹41,000 crore from minority stake sales and ₹28,500 crore through strategic sales), but the Department has been able to raise just ₹12,701 crore so far.

In earlier years, too, the Centre had set a target of ₹40,000 crore as it tried to bridge the fiscal deficit but the Department was unable to meet it.

With a policy on strategic sales likely to be in place soon, the Department of Disinvestment is, however, more optimistic about PSU stake sales in 2016-17.

“A lot will depend on how the market performs but strategic sales can go through smoothly from the next fiscal year onwards if the Cabinet approves it soon. This fiscal, we were totally unprepared for strategic sales,” said an official.

Sources said the issue will be discussed with the Departments of Expenditure and Economic Affairs, which will ultimately finalise Budget targets for 2016-17.

Fiscal pressures

However, the reliance on disinvestment proceeds is unlikely to ease even next fiscal year, with the Centre facing hefty and multiple expenditure demands, including those for implementation of the Seventh Pay Commission recommendations and the One Rank, One Pension scheme for defence personnel. In its Medium Term Fiscal Policy Statement of Union Budget 2015-16, the Centre had outlined plans to raise ₹55,000 crore and ₹50,000 in 2016-17 and 2017-18, respectively, as disinvestment proceeds.