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India says privatisation integral part of reforms process
Tuesday, 03 December 2002, 20:30 IST
NEW DELHI: The Indian government said Tuesday that the privatisation drive was an integral part of the country's economic reforms process though receipts from these were sharply lower than estimated.
"Disinvestment is an integral part of the reform process," said a mid-year economic review report presented in Parliament by the finance ministry.
"Disinvestment has proceeded by building up a political consensus across a wide spectrum of opinion," said the report, which indicates the government policies that are likely to be announced in the annual budget for 2003-04.
This is the first time the government has undertaken a mid-year review of the economy, taking into account the challenges and opportunities ahead.
The report said the privatisation drive should be "viewed purely from the revenue generation perspective.
"It is being undertaken essentially to unlock the productive potential inherent in the public sector undertakings.
"One of the yardsticks for measuring the huge productive potential of the public sector enterprises is the disinvestment receipt from such enterprises, relative to the losses they presently incur".
India's ambitious privatisation drive, projected as the cornerstone of the reforms programme, has repeatedly come under attacks in recent months, with the ruling coalition's allies demanding review of the divestment agenda.
The government was forced to postpone the sell-off process of two state-run oil giants - Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. - for three months in September due to intense political squabbling.
Prime Minister Atal Bihari Vajpayee has been at pains to defend the sell-off policy with its opponents -- Human Resource Development Minister Murli Manohar Joshi, Defence Minister George Fernandes and Petroleum Minister Ram Naik.
New Delhi plans to raise 
120 billion from sales of shares in state-owned firms in the current financial year. It has repeatedly failed to meet targets in the past because of stiff protests from opposition parties and trade unions.
"While disinvestment receipts, estimated at 30.22 billion in the first half of the current year against the budgeted target of 120 billion for the entire year, indicate a slower than estimated pick up in the momentum of such receipts, the underpinning of the process in a wide consensus has the advantage of guaranteeing no rollback of such reforms," said the review report.
Source: IANS
120 billion from sales of shares in state-owned firms in the current financial year. It has repeatedly failed to meet targets in the past because of stiff protests from opposition parties and trade unions.
"While disinvestment receipts, estimated at 30.22 billion in the first half of the current year against the budgeted target of 120 billion for the entire year, indicate a slower than estimated pick up in the momentum of such receipts, the underpinning of the process in a wide consensus has the advantage of guaranteeing no rollback of such reforms," said the review report.
Source: IANS