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Last Updated: Tuesday, 16 August 2005, 15:49 GMT 16:49 UK
India scraps sales of state firms
Protester clashes with police in Delhi
Protesters opposed selling off profitable state firms
India's Congress-led coalition government has dropped plans to sell off 13 profitable state firms.

The plans to sell controlling stakes in the 13 - all of which are profitable - to strategic investors had been set in motion by the previous administration.

But pressure from leftist coalition allies means that Finance Minister Palaniappan Chidambaram has scrapped the idea.

Strategic stake sales were "not transparent", he said.

Sales of smaller stakes in the 13 might happen on a case-by-case basis, he said.

They include National Aluminium Company, Shipping Corporation of India, National Fertilizers and Hindustan Petroleum, a junior minister said.

National Aluminium Company
Shipping Corporation of India
National Fertilizers
Hindustan Petroleum
Engineers India
Balmer Lawrie
Hindustan Paper Corporation
State Trading
National Building Construction
Engineering Projects India
Sponge Iron India
Manganese Ore India
Rashtriya Chemicals and Fertilizers

A clause in a banking reform bill which would have cut the state stake in several banks to 33% from 51% has also been dropped.

The previous government, led by the Hindu nationalist Bharatiya Janata Party, had set the sell-off programme in motion to try to deal with India's chronic budget deficit of about 4-5% of gross domestic product.

The current Congress Party-led administration of Prime Minister Manmohan Singh wants to use privatisation receipts to fund rural infrastructure projects.

In order to keep communist MPs in the governing coalition, Mr Singh has promised only to privatise loss-making firms.

The leftist MPs say they fear widespread job losses.

Earlier in August, a plan to sell 10% of profitable Bharat Heavy Electricals was also put on hold after criticism from communist MPs.

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