The Indian cabinet is likely to make a decision Tuesday, February 13, on the sale of its 50 percent holding in the country's largest carmaker Maruti Udyog Limited (MUL), officials said. They said Prime Minister Atal Behari Vajpayee is expected to look at the possibility of floating a global tender for its stake in Maruti.
Maruti, a joint venture between the Indian government and Japan's Suzuki Motor Corp, has a 56 percent share of the Indian car market. The government announced its intention to sell its holding in Maruti to a strategic partner in November last year, but the move was strongly opposed by Heavy Industries Minister Manohar Joshi.
The Indian government will need consent from Suzuki as neither party can sell or transfer shares without the written consent of the other under the terms of the original agreement. The cabinet meeting on Tuesday is also expected to see decisions reached on reforms in the power sector where nearly a fifth of India's total generating capacity gets lost in transmission, distribution and theft.
Such reforms would need the backing of all the parties in the coalition federal government, which is led by Vajpayee's Hindu nationalist BJP. The meeting will also address a key concern highlighted by the power industry — that of irrational pricing, business newspapers said.
The power ministry is in agreement with industry representatives that the high cost of power has made it non-competitive and that pricing should reflect the cost of supply. India needs an estimated $252 billion of investment in the next decade to generate an additional 100,000 megawatts of power to meet its shortfall. —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)
