Finance Minister Yashwant Sinha on Sunday, December 17, hinted India would fall short of its 100 billion rupee ($217 million) target for privatization revenue in the fiscal year to March 2001.
Sinha, however, told a business conference on Sunday there would be no long-term fallout or cause for "despondency" as the government had done the preparation to carry out aggresive strategic sales in the next fiscal year.
"The privatization process was bound to take time... if there are a series of strategic sales next year, this year's performance cannot be termed a failure," said Sinha.
He added India had made a "directional shift" graduating from disposing of a small number of shares in state enterprises to implementing "strategic sales" of giant public sector companies.
According to India's privatization department, the government is ready to move forward with the privatization of as many as 30 companies in the current fiscal year, compared with just two the previous year.
Deflecting criticism that India's reforms were moving at a snail's pace, Sinha said they were on track but the process "involved difficult decisions and seeking parliamentary approval for amending existing pieces of legislation."
He added it was an uphill task because of "resistance" from political lobby groups and trade unions.
Citing the example of a bill which seeks to reduce government holdings in nationalised banks to 33 percent, Sinha said opposition parties in parliament resisted even the introduction of the legislation.
But Sinha also indicated that New Delhi would not be pressurized into speeding up the reform process.
"If we were to increase our speed and fall flat on our face, then no one will come to our rescue," Sinha said.
He added he was confident the government's borrowing program was "on target" this year and would not exceed the budgeted target.
"I am happy that this year we have been able to keep it under a tight leash so that we do not exceed the borrowing program. I am hoping that we will finish the year within the budgeted program," Sinha said.
The government has budgeted 1.17 trillion rupees in gross market borrowings in 2000/01 (April-March).
The finance minister said the government planned to introduce in the ongoing session of parliament the Fiscal Responsibility Bill which seeks to place a statutory cap on its borrowings from the market.
Sinha said this would be a "bold new initiative to tie the government's hands" vis-a-vis making borrowings.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
