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Wednesday, 6 February, 2002, 15:09 GMT
India shares surge after sell-offs
Bombay Stock Exchange traders
Some shares rose to the maximum permissible 10% on Wednesday
Investors in India have cheered the government's recent steps to boost privatisation and ease control over the pharmaceutical industry.

Indian shares soared to a four-week high on Wednesday, with some shares rising to their maximum permissible level, and volume some 50% above its usual level.

In an attempt to bridge the fiscal deficit, the government on Monday speeded up the sale of stakes in strategic industries, and promised further privatisations in the near future.

For years, investors have criticised Delhi for its slow pace of market reforms and privatisation.

The government raised less half of the targeted amount of cash from sale-offs in the past 10 years, being reluctant to sale of profitable telecom, oil and pharmaceutical companies.

Speeding up privatisation

On Monday, the government announced the sale of a 25% stake in telecom giant and internet provider VSNL to the Tata group, and 33.6% stake in IBP, which runs a chain of over 1,500 petrol stations across the country.

Shares in state-run companies rose after the sales were announced.

Refiner Hindustan Petroleum Corporation and Bharat Heavy Electricals, a power generation equipment producer, rose to the maximum permissible 10% on Wednesday.

Privatisation minister Arun Shourie also announced that stakes in the two firms could come up for sale in three months' time.

The Indian pharmaceutical industry also saw a light on Tuesday, when the government approved a new drugs policy, easing its control over the companies and aimed at boosting investment.

See also:

05 Feb 02 | Business
Boost to India privatisation
14 Dec 01 | Business
VSNL in giant shareholder payout
14 Jan 02 | Business
Indian and Pakistani markets rally
13 Dec 01 | Business
Indian markets hit by shooting
05 Feb 02 | Business
Slow growth threatens India's poor
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