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India can beat 02-03 privatisation target: Shourie

India said on Tuesday it could exceed its privatisation target of Rs 120 billion in the year ending March 2003 provided the Union Cabinet took steps to facilitate the process.

India has consistently failed to meet its privatisation target in the past because of stiff opposition from trade unions and political parties.

The government's sputtering privatisation programme got a shot in the arm earlier this year when it sold controlling stakes in a giant telecoms firm (VSNL), an oil marketing company (IBP), India's second largest petrochemicals firm (IPCL) and the country's largest carmaker Maruti Udyog Ltd -- a joint venture with Japan's Suzuki Motor Corp.

"We believe we can if the Cabinet takes four to five steps," Divestment Minister Arun Shourie told a news conference in Kolkata when asked whether the government could exceed its target set for the current financial year.

Shourie said that the Union Cabinet Committee on Divestment would meet on Thursday on further divestment in government-owned companies including Shipping Corp, the nation's biggest shipping line.

"The steps needed to be taken to help us exceed our target will be discussed at Thursday's Cabinet meeting," Shourie said, adding one item on the agenda would be how to cut short the time taken by Board for Industrial and Financial Reconstruction to decide on an ailing company's restructuring package.

He did not elaborate on the other steps needed to hasten the privatisation process.

"ON TRACK" PRIVATISATION

The minister said that SCI's divestment "was on track" though he did not give a particular date. Last month, a top official of Shourie's ministry said bids would be invited to buy 51 per cent government stake in SCI by August-end.

"Why stick to a date? But it is on track," Shourie said.

The government has put a 26 per cent cap on foreign investment in SCI. "We have kept a cap on it as there are people that feel SCI is strategically important and we want to prevent a noisy (political) fallout," Shourie said.

Several parties within the ruling coalition and the opposition have in the recent past accused the government of "recklessly divesting" in state-owned firms, leading to noisy scenes in Parliament.

Transporting crude oil and petroleum products to energy-hungry India accounted for 80 per cent of SCI's revenues of Rs 29.95 billion in the year to March 2001.

MOPPING UP BILLIONS

The government has mopped up around Rs 27 billion in the current year starting April which includes raising Rs 14.91 billion from the sale of 26 per cent stake in second-largest petrochemicals firm, IPCL, to the Reliance group.

The government also plans to sell stake in two state-run refiners HPCL and BPCL.

But Shourie said that the nation's largest refiner, state-run Indian Oil Corp would not be allowed to bid for the smaller government-owned refiners.

Though privatisation revenues have fallen woefully short of targets in earlier years, Shourie said that the latest momentum in the privatisation process was unmatched.

"Because of the success of disinvestment, there is greater credibility to the government's reforms process. Also, this has helped the market capital of public sector companies increase by Rs 7500 billion since January."

Last week, the government decided to sell five state-run hotels for Rs 1.69 billion.

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