15 May 2004	Saturday	24 Rabi-ul-Awwal 1425

NEW DELHI, May 14: Indian bourses on Friday registered a massive fall of a whopping 330 points at the Bombay Stock Exchange over fears that the communist-led Left Front , set to play a key role in the new government, would stall economic reforms

The fall was triggered after senior communist leader Sitaram Yechury was quoted by the Business Standard as saying that the Left Front would oppose "crony capitalism" and reckless disinvestments in state-run units.

In a highly volatile trading session on Friday, the index, led by a steep fall in PSU frontliners, crashed by a whopping 372 points during the intra-day trades.

Soon after touching a high of 5,416 on selective buying support during the early morning trades, the index tumbled from higher levels to remain weak thereafter following correction in most of the old economy stocks.

The market was in total shambles towards the closing hours, as the index plunged below the 5,100-mark to touch a low of 5,051.

The Sensex wrapped up the session with a huge slump of 6.10pc (down 330 points) at 5,070. The Nifty shed 7.87pc (down 135 points) to close at 1,582.

Seeking to assure investors and calm the volatile stock markets, the Congress Party said that a healthy capital market was important for the country's development and it was not opposed to disinvestments as such.

Former pro-reforms finance minister Manmohan Singh, tipped for the job again, said: "Investors can rest assured that the new government will pursue policies to create favourable climate for growth."

Earlier in the day, Dr. Singh, entrusted with the responsibility of formulating a Common Minimum Programme for the arriving coalition in consultation with Congress allies and left parties, telephoned the GeneralSecretary of the main communist party (CPI-M), Mr Harkishan Singh Surjeet.

Asked if the Congress-led government would reverse the disinvestment policies under pressure from Left parties, Dr. Singh said: "We are not pursuing privatization as an ideology. We are not against disinvestment per se. We are open to all options."Among the worst hit were state-owned oil units and Dr Singh was quick to assure the investors: "There should be no doubt that we will pursue reforms in oil sector that are in our national interest.

Mr Yechury, politburo member of the CPI-M said: "People's welfare and not crony capitalism will be the priority of the reform process. People's welfare will occupy centrestage as far as the reform process is concerned. The government policies will not favour corporate profits."

He told Business Standard that the National Democratic Alliance of Prime Minister Atal Bihari Vajpayee had economic policies, which were designed to promote interests of big business and foreign capital leading to erosion of economic sovereignty.

Mr Yechury said the main thrust area of the Congress-led government will be the public distribution system in the country. India is facing a severe agrarian crisis, he said.

"The Vajpayee government tried to categorically dismantle the public sector. Profit-making public sector undertakings will no longer be sold for a song. The 'navratnas' should not be sold off to private players.

"An attempt to revive loss-making PSUs, should first be made, with possible private capital induction in a public-private joint venture, failing which it should be disposed after discussions with the management, the workers and the government," Mr. Yechury said.-JN