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FM assures 'transparent' inter-corporate investments, protection for NBFC-hit small investors

Union Finance Minister Yashwant Sinha today said ensuring transparency in commercial operations would be the guiding factor in the new guidelines to be issued shortly with regard to inter-corporate investments.

Talking to newspersons on his arrival in Madras, he said the Union government was keen that a facility created to meet a certain situation was not misused.

He said the new guidelines would be issued in the wake of yesterday's Union Cabinet decision to free inter-corporate investments from government approval.

The government proposed to hike the present ceiling of 30 per cent specified by the Companies Act on inter-corporate loans and investments, he added.

He rejected as ill-informed the Congress criticism of the government's decision to allow corporates to buyback their shares. "The Congress should go home and do its homework," he said, adding that the demand for buyback of shares was a long-pending one ignored by the Congress when it was in power.

Sinha said the high-level committee led by special secretary (banking) to evolve norms for the functioning of non-banking finance companies would submit its report to him tomorrow.

He said the Union government was clear that the interests of small investors should be protected while evolving the norms.

These norms would have to be revisited to ensure that the NBFCs were not killed, he pointed out.

On the demand of the Associated Chamber of Commerce and Industry that the government go in for divestment of public sector undertakings without waiting for the recovery of the primary markets, he said the divestment process was already on.

Asked about the proposed divestnment of the public sector Air- India and Indian Airlines, he said the Union government was keen on first strengthening the two organisations so that they would be able to come out of their present problems.

Talking to newspersons after addressing small-scale and tiny industrialists at a meeting organised by the National Confederation of Small Scale Industries Associations in Madras, he said the Union government wanted to ensure that while evolving the norms, the interests of small investors were protected.

He exhorted the small scale sector to be prepared to face competition from across the world and from India's neighbourhood.

He said more than 600 of the 830 items reserved for the small scale sector in the country were already being imported.

With free SAARC becoming a reality in 2001, the countries in our neighbourhood would be able to export their goods to us, with the World Trade Organisation agreement in place, trade and tariff barriers would go within the next five or six years and our small scale industries would face competition from all over the world, he added.

Sinha said the BJP-led government at the Centre was fully committed to the development of the small scale sector which would have to ensure production of quality products to compete in a globalised scenario marked by hi-tech marketing and advertising.

The Union finance ministry would sympathetically consider the demand for easier access to bank credit for the small scale and tiny sector, he added.

UNI