We had said it long back that due to certain happenings in Sarkar Raj (Abhishek's death) there won't be any further sequels. But at that time and after the release of Sarkar Raj, there was a buzz about another (probable) sequel.
In fact, there were even assumptions that Kay Kay Menon's now grown up son (from Sarkar) would be called upon in the third part to take over the empire. Some had even gone ahead and 'offered' that part to super-hero Hrithik Roshan!
However, Ram Gopal Varma, the director of Sarkar, Sarkar Raj and the latest hit, Phoonk has emphatically said that there will be no more sequels, rather a second sequel to Sarkar. And that should put an end to all speculations on that front.