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PM says India has to pursue privatization
By agencies
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Tuesday, 17 May 2005, 19:30 IST
NEW DELHI: Prime Minister Manmohan Singh has warned India's political parties they must agree on the privatization of state-run firms to raise badly needed funds for development.
Singh, who faces stiff opposition from left-wing parties on privatization, said the returns would be deployed in public sector spending.
"We require political consensus both within our own party and across political parties to take this agenda of fiscal reforms forward," Singh told a Congress party committee meeting, according to Economic Times newspaper.
"We must once again pursue disinvestments in public enterprises, both to raise resources for development and to make public enterprises more accountable and efficient," he said.
The Congress led union government says strategic state firms should be retained to protect national interests and avoid job losses, a key demand of its communist allies but wants reforms in others to make them more accountable and efficient.
In the early 1990s as finance minister Singh earned the sobriquet "economic liberator" for opening up India's inward-looking economy to the world. Singh made it clear that his government had no ideological aversion to privatization, The Economic Times said.
"We need the public sector in strategic areas but we need an efficient public sector run by professional and competent managers in a transparent manner," he said.
India plans to raise more than a billion dollars in fiscal 2005-2006 by selling state-run companies, according to Finance Minister P. Chidambaram.
Successive finance ministers have in the past-announced privatization targets but failed to meet them. Singh's government earned privatization revenues of $875 million for the fiscal year 2004-2005.
India said it was launching a massive program to build tens of millions of homes for the poor but warned the project was likely to cost more than $40 billion.