Having failed to meet the selloff target for the fourth straight year, the divestment ministry is wary of setting any target for 2003-04.

It will now be left to the finance ministry to assess the approximate divestment proceeds to be included in the capital receipts of the Budget.

"We have communicated to the finance ministry that in the absence of any schedule for divestment, it is difficult to assess deals that will materialise in the next financial year and the amount that can be expected," a senior divestment ministry official said.

Divestment receipts for 2002-03 are at Rs 3,336 crore (Rs 33.36 billion) till date and the government hopes to end the year at about Rs 4,200 crore (Rs 42 billion) after completing the initial public offer of 25 per cent equity in Maruti Udyog Ltd.

The government will get at least Rs 828 crore (Rs 8.28 billion) through the issue based on the Rs 2,300 per share underwriting by Suzuki Motor Corporation, which now holds majority control in the car maker.

The finance ministry is, however, likely to maintain the target of Rs 12,000 crore (Rs 120 billion) for 2003-04, which reflects cautious optimism despite big ticket divestments of Hindustan Petroleum Corporation Ltd, Bharat Petroleum Corporation Ltd and Nalco lined up for next year.

The strategic sale of 51 per cent government equity in Engineers India Ltd and Shipping Corporation of India is also expected to materialise in early 2003-04.

Bharat Sanchar Nigam Ltd and Mahanagar Sanchar Nigam Ltd are also likely to be added to the divestment list next year.

The divestment ministry has pointed out that despite the Cabinet Committee on Divestment clearing in principle the sale of HPCL and BPCL in February 2002, the government is far from completing the transaction.

"The possible US invasion of Iraq could dramatically reduce the valuation of the petroleum marketing companies and knock the process off track. The due diligence of HPCL will take a long time since it involves valuation of property, which is a complex exercise. Labour unions are already up in arms," the official said.

Run-up to the Budget 2003