India's divestment plans in limbo as market wilts

The market meltdown following the financial downgrading of the United States by credit rating agency Standard and Poor's (S&P) may either force the Indian government to cut down or defer its ambitious privatisation target.

Disinvestment secretary Mohammed Haleem Khan today hinted that the government may not raise the targeted Rs40,000 crore from sale of government stake in public sector units and may postpone some of its divestment plans.

He said while the government has engaged professionals to advise it on divestment and has placed some companies in the pipeline, there was no decision as yet on when and how these divestments would be carried out. It is still uncertain, he said.

"It is difficult to say, if the current target will remain intact or revised," Khan said. The government is monitoring the situation, he added.

The government has raised around Rs1,144 crore so far this financial year by sale of part stake in Power Finance Corporation (PFC).

The government had lined up SAIL, ONGC and HCL for divestment after the follow-on public issue of PFC in May this year.