India calls off sale in 13 state companies

By agencies   |   Tuesday, 16 August 2005, 19:30 IST
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NEW DELHI:India today called off its plan to sell stakes to strategic investors in 13 state-run companies amid growing opposition from the government's leftist allies which feel it would lead to massive job losses. The firms include aluminum maker NALCO , oil refiner HPCL , Engineers India Ltd , Shipping Corporation of India , National Fertilizers Ltd. and Rashtriya Chemicals and Fertilizer . "The Indian government has formally decided to call off the disinvestments through strategic sale in 13 state-run firms," junior finance minister S.S. Palanimanickam said. The decision, which comes just 10 days after the government put on hold its plans to sell a stake in engineering firm Bharat Heavy Electricals Ltd and its residual stake in car-maker Maruti Udyog Ltd, will be a blow to its plans to fund projects for the rural poor through asset sales. The cash-strapped government plans to set up an investment fund with the proceeds of asset sales to pay for infrastructure projects for the rural poor and to revive weak state-run firms. The minister said the decision to abandon plans to sell stakes in these firms was taken in line with the ruling coalition's policy blueprint, the common minimum program. The communists, key backers of the Congress-led government, have threatened to launch a nationwide protest if the government steps up sales in profit-making firms.