ET reported that government may not be able to meet the target of raising INR 40,000 crore from sale of public sector equity in the backdrop of downturn in the stock markets.

Finance ministry representatives have given an indication in this regard in the meeting of the full Planning Commission. They added that government would not like to enter the market as it feels that in the current situation PSU equities may not fetch adequate price.

Finance minister Mr Pranab Mukherjee had said in Lok Sabha that it is not right time to divest the government equity in the public sector units.

He had said that "I am fully aware of the current volatile situation in the market, and surely not only me, any prudent Finance Minister would not like to dispose of valuable assets.”

He said while taking a decision on disinvestment, the government would keep in mind the market conditions.

Europe's deepening debt problem and worries that the US could slip into recession again have led to a mayhem in global stock markets.

In the last fiscal too, the government had missed the disinvestment target of INR 40,000 crore and was able to mop up only a little over INR 22,000 crore.

Finance Ministry representatives at the Commission's meet also said that the government should not depend on sale of stakes in the PSUs to fund its Plan expenditure.

The government has already approved disinvestment of 5% paid up equity capital of Oil and Natural Gas Corporation Limited and Steel Authority of India Limited. In addition, approval has been granted for disinvestment of 10% paid up equity capital of Hindustan Copper Limited and National Building and Construction Corporation Limited.

(Sourced from ET)