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MUMBAI(PTI): The government is likely to drastically scale down the disinvestment target for 2016-17 from the one set for the current fiscal as markets are expected to stay subdued, industry chamber Assocham said on Thursday.
The government had budgeted to collect Rs 69,500 crore through PSU disinvestment in current fiscal. But volatile market conditions have forced it to delay stake sale plans.
With only two months left for the fiscal to end, government has so far been able to mop up just Rs 12,700 crore through stake sale in four PSU.
The markets are expected to stay in subdued mood even in the next fiscal and the government is likely to drastically scale down targets for realisation of resources from PSU stake sale in the Budget for 2016-17, Assocham said.
“Hopefully, the Finance Ministry will desist from setting an un-realistic disinvestment yet again for 2016-17,” it said its Budget expectations.
The disinvestment targets have “gone completely haywire under successive governments” Assocham said, adding that either they have been doing a mere academic budget-making exercise or getting them completely wrong.
“With the odds stacked against the equity market in 2016 and the world economic prospects looking even grimmer, there is less hope of a recovery in the financial markets,” Assocham Secretary General D S Rawat said.
The industry chamber said the decline in oil prices has helped the Finance Ministry to come closer to the fiscal deficit target for this year as otherwise there would have been a huge shortfall in the Revenue Budget in 2015-16.
It expects the government to raise another Rs 2,000-3,000 crore in the remaining months of this fiscal from PSU stake sale and a shortfall of at least Rs 55,000 crore with regard to disinvestment target of 2015-16.
The government has missed its disinvestment target for four consecutive financial years.
In 2013-14, the government has raised Rs 15,819 crore against the target of Rs 40,000 crore. In 2014-15 it raised Rs 24,277 crore against the target of Rs 36,925 crore, Assocham said.