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June 30, 1998


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Yashwant asks industry to shed Moody's blues

Union Finance Minister Yashwant Sinha asked the Indian industry to shed Moody's blues (Moody's recently downgraded India's rating) and look to the future, saying that the industry was on the road to revival. In April and May, exports had registered a mild growth as against a negative growth of 10 per cent last year. Tax collections had increased by 25 per cent in April and May this year.

Sinha said government holdings in non-strategic public sector units would be brought down to 26 per cent and unrevivable units would be closed down.

Addressing the Madras Chamber of Commerce and Industry, he said the disinvestment proceeds would be utilised only for building new assets and not to bridge budgetary gaps as in the past.

In the case of unrevivable units, the employees who had put in 30 years of service would be given 60 months' wages. Young workers can start a new life, he added.

He said disinvestment of the public sector would be done in a time-bound manner and the programme would be announced after the Union Budget was passed by Parliament after it resumed its sitting on July 3.

He said none of the ongoing foreign-assisted programmes would be hurt by the economic sanctions against the country and there was rethinking in the United States on the efficacy of the sanctions themselves. The US was the only country which had imposed the sanctions and its impact would not harm the Indian industry, he declared.

Touching on various aspects of the economy, Sinha said the Union government was taking vigorous steps for attracting foreign investment and a monitoring officer would ensure that projects were cleared in 90 days.

Even in the worst crisis of 1991, India had fulfilled all its foreign obligations and the country was now the safest place for investment and also for repatriation of return on investment. Replying to critics of the Union budget, he said governmental policy could not be framed with short-term objectives. Market sentiments were bound to improve with the unfolding of the real status of the economy, he said.

Answering critics that the Budget did not provide for the sanctions, Sinha said none of the ongoing programmes would be affected by the sanctions, and hence, provisioning was not made.

He was in routine dialogue with the World Bank president and there was no reason for worry, he said.

MCCI president N Srinivasan asked the minister to go ahead with the economic liberalisation agenda and welcomed the general tenor of the Union Budget.


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