New Delhi: The government may not be able to meet the target of raising Rs 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 on Saturday, sources said.

The government would not like to enter the market as it feels that in the current situation PSU equities may not fetch adequate price, they added.

Finance Minister Pranab Mukherjee had said on Friday in Lok Sabha that it was not right time to divest the government equity in the public sector units.

"...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 had said in the Lok Sabha.

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 line with weak global trends, the Bombay Stock Exchange benchmark index Sensex on Friday dipped below the 16,000-level after nearly 15-months on sustained pull-out by foreign funds. It it recovered a little to close at 16,141.67, recording a loss of 328 points.

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

They raised the question as to how long the government would keep lowering its equity to fund budget plans, sources said.

The Centre has sold its equity only in Power Finance Corp Ltd this year.

The government has already approved disinvestment of five per cent paid-up equity capital of Oil and Natural Gas Corporation Limited (ONGC) and Steel Authority of India Limited (SAIL).

In addition, approval has been granted for disinvestment of 10 per cent paid-up equity capital of Hindustan Copper Limited (HCL) and National Building and Construction Corporation Limited (NBCC).

The disinvestment of HCL and SAIL is in conjunction with the issue of fresh equity of 10 per cent and five per cent, respectively.

Proposals for disinvestment of five per cent paid-up equity capital of BHEL and 10 per cent of NACLO are at various stages.