NEW DELHI, Nov 30: The future of India’s stalled privatization programme depends on Prime Minister Atal Behari Vajpayee and his deputy Lal Krishna Advani, privatisation minister Arun Shourie said on Saturday.
It has been stormy going for India’s privatisation reforms since September, after Vajpayee delayed by several months the sale of government stakes in Hindustan Petroleum and Bharat Petroleum over protests from Defence Minister George Fernandes and Petroleum Minister Ram Naik.
The outcome now depends on the prime minister and the deputy prime minister, what they feel about the issue, Shourie told the Press Trust of India (PTI) news agency.
It is believed the companies will now be privatised only in the next financial year.
India had hoped to raise $2.5 billion in the year to March 2003 through the sale of stakes in 27 state firms, but so far has managed to raise only one billion dollars.
The cabinet in September was also forced to defer a plan to raise foreign investment limits in sectors such as telecommunications, insurance and civil aviation due to pressure from political allies and trade unions.
Earlier this month, Fernandes demanded a review of the privatization programme.
On Saturday, when asked about a December 7, deadline for the sale of the fuel companies, Shourie said he was unaware of any progress on the issue.
Everybody says there must be a review or a course correction but no alternative has so far been worked out. One or two letters were sent to us; we have responded with our views to the prime minister’s office, Shourie said.
Though he admitted the disinvestment target of Rs120 billion would be difficult to achieve, Shourie ruled out any immediate review, PTI reported.
The target cannot be achieved if the present situation continues, he was quoted as saying.
Simple decisions are delayed and take three to four years to implement... how can we keep pace with the rest of the world?
MUMBAI: India’s foreign exchange reserves surged to a record high of $66.588 billion on stepped-up remittances in a weakening dollar environment and on foreign investments attracted to a strong domestic stock market.
Data released by the Reserve Bank of India showed currency reserves rose for the fourth straight week in the week to November 22.
The country’s foreign exchange reserves rose by $564 million in that week and by an astounding $12.434 billion since the start of the financial year in April.
The gains have been on a combination of factors — exporters, non-residents and foreign funds investing in stocks, said Rajiv Anand, head of investments at Standard Chartered Mutual Fund.
Expatriate Indians have been increasingly converting their dollar deposits into rupees after the greenback eased against most majors amid doubts about the US economic recovery.
Besides, foreign funds have been steadily hiking their purchases in domestic bourses as valuations have turned attractive and following positive comments about the world’s 12th largest economy by global agencies.
Moody’s Investors Service said earlier this month it may upgrade India’s foreign currency debt ratings because its external financial position had improved considerably.
Global index compiler Morgan Stanley Capital International raised India’s weightage in the emerging market index after several leading companies increased the free float of their shareholdings.
Foreign funds bought Indian debt and equity assets worth over $125 million.—AFP/Reuters