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Friday, 23 June, 2000, 15:15 GMT 16:15 UK
India sells state-owned firms
workers
India wants to approach privatisation cautiously
India has announced privatisation plans for 10 state-owned firms, as part of its economic reforms programme.

A cabinet panel approved the decision "in principle" and said it aimed to raise 100 billion rupees ($2.3bn) through the sale in the current fiscal year.

But the absence of decisions on the sale of oil and telecom companies has disappointed the financial markets.

Experts expressed concern at what they saw as the painstakingly slow process of India's privatisation programme.


Jaitley
Jaitley: Consultants will help firms plan privatisation
The government announced it was selling its equity in the Mining and Minerals Trading Corporation, State Trading Corporation and petroleum company IBP.

Disinvestment Minister Arun Jaitley said the cabinet panel had asked the relevant ministries to present proposals for the sale of government equity in these companies.

Not announced

Mr Jaitley said that as a first step, global advisors would be appointed to help these firms formulate a privatisation plan.

"For others, like Air India and Indian Airlines, we will appoint global advisors immediately."



For Air India and Indian Airlines, we will appoint global advisors immediately

Arun Jaitley

The cabinet panel was also expected to discuss the privatisation of India's largest car-maker, Maruti Udyog Limited and state-run telecom firms MTNL and VSNL.

Several giant state-owned oil companies, which are among the most profitable government firms, also did not figure.

Disinvestment Secretary Pradeep Baijal said the cabinet had asked the petroleum ministry to carry out restructuring of these companies before proceeding with privatisation.

Analysts expressed their disappointment over the piecemeal approach to the process.

"There is an urgent need for a concrete action plan for disinvestment which is missing," said BB Bhattacharya, director at the Institute of Economic Growth.

A BBC correspondent says the government is believed to be under tremendous pressure over the privatisation programme.

Some government members as well as left-wing opposition parties are opposed to the sale of state-owned firms.

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