India's privatisation drive to continue despite delays

Monday, 24 November 2003, 08:00 Hrs
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NEW DELHI: Indian Finance Minister Jaswant Singh said Sunday the government's ambitious privatisation programme would continue and investors shouldn't get disheartened by delays in the process.

"The disinvestment programme will continue," Singh said while addressing the inaugural session of the India Economic Summit, organised jointly by the World Economic Summit (WEF) and the Confederation of Indian Industry (CII), here.

"You shouldn't at all be discouraged by the court intervention. It (the privatisation process) takes time...democratic institutions take time," he told the gathering of over 500 global business leaders gathered for the three-day event.

In a major setback to the privatisation programme, the Supreme Court in September restrained the government from selling its stake in oil majors Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) without parliamentary approval.

The apex court's verdict came as a blow to the government's efforts to raise money through the sale of its stake in public sector companies to rein in the spiralling fiscal deficit.

The Supreme Court has now agreed to review the verdict.

The government had planned to raise 132 billion in the fiscal year ending March 31, 2004, through selling its stake in public sector companies. It has so far managed to raise only a fraction of that.

"One shouldn't be disenchanted at all. Every such occasion will be a learning experience," said Singh.

He said the government was committed to continue with the reforms process in the financial sector, especially in banking and insurance companies.

While highlighting the rapid advances India has made in putting the economy in higher trajectory of growth, Singh said the country's spiralling fiscal deficit continued to be a matter of concern.

"The fiscal deficit continues to worry me. We need to contain fiscal deficit and we are committed to do so. We have been able to greatly contain the movement of fiscal deficit," he said.

The government plans to restrict the fiscal deficit in the fiscal year ending March 31, 2004 at 5.6 percent of the gross domestic product.

Referring to steps taken by various states to rein in their ballooning fiscal deficit, the finance minister said: "I have already witnessed a much greater sense of restraint and responsibility in the them."

Singh said India could very soon emerge as a global centre for research and development since the country had vast pool of intellectual capital.

Source: IANS
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