Privatisation stalemate not to affect pace of reforms
Monday, 18 November 2002, 08:00 Hrs
NEW DELHI: The stalemate over the government's ambitious privatisation drive due to political squabbling will not affect the pace of economic reforms in India, Finance Minister Jaswant Singh has said. "Disinvestment is only one part of reform," Singh told The Economic Times in an interview published Monday. "Of course it's an important part, an integral part of reform. The ministry remains fully committed to it. But simultaneously the prime minister (Atal Bihari Vajpayee) is facing the situation of having to take the coalition along with him," he added. Vajpayee is expected to meet select cabinet colleagues this week on the contentious privatisation agenda that has hit a roadblock due to growing opposition within the ruling coalition. The gasping privatisation drive, which is the cornerstone of the government's economic reforms programme, came under fresh attack Thursday with the leader of a key ally of the ruling coalition demanding review of the divestment agenda. Vajpayee has been at pains to defend the government's sell-off policy with its vocal 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. The finance minister, however, said the political differences over the sell-off of blue-chip public enterprises would not stall the process. "These are the demands of democracy that cannot be abdicated. It's not an impasse. It is a period in which a determination was made of the questions raised. It was time usefully spent," Singh said. He hinted at the possibility of the government continuing with income tax breaks on investment on infrastructure and housing to boost public spending in a slowing economy. "I have said this elsewhere as well that there are certain sectors that will require a leg-up and encouragement. Those that are employment generating, are immediately beneficial, for example housing, tourism". On stalling of key economic legislation in Parliament in the absence of a consensus among political parties, Singh said: "These (the economic bills pending) are not really politically volatile or confrontationist in the normal course. "Parliament, however, is sovereign. I have to abide by the procedures of Parliament. I cannot shortcut them. I cannot bully Parliament. The whole aspect of parliamentary life is persuasion and consultation. "For that there has to be discussion. Without discussion, legislation cannot take place." Analysts say debate in Parliament on as many as 23 economic bills during the winter session that started Monday is likely to be interrupted by opposition parties. The main bills on the agenda this session include a proposed law to limit the budget deficit to two percent of gross domestic product (GDP) by 2006 from last year's 5.9 percent and reducing government's stakes in state-run banks to 33 percent.