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Shourie confident of meeting selloff target

India is on track to meet its privatisation target of raising Rs 120 billion in the year ending March 2003, Divestment Minister Arun Shourie said on Friday.

India's decade-old faltering privatisation programme, which has rarely met its targets, received a boost earlier this year with two big-ticket sales of a state-run petrochemical firm and the country's largest car maker.

"We are confident of meeting the target. We have submitted a plan to the finance minister as to how this target can not only be met but also exceeded subject to some conditions," Shourie told reporters after a privatisation panel meeting.

The panel decided on Friday to sell five ITDC hotels for Rs 1.69 billion.

Shourie said the plan suggesting ways to meet targets would also be discussed at the next meeting of the privatisation panel, the date for which is still to be decided.

In the current financial year starting April, the government has mopped up close to Rs 27 billion from the sale of state-run firms, a fifth of the current year's target.

Earlier in May, the government approved two big-ticket deals, first raising Rs 10 billion in return for relinquishing majority ownership in the country's largest carmaker Maruti Udyog Ltd to joint venture partner, Japan's Suzuki Motor Corp.

It also raised Rs 14.91 billion from selling a 26 per cent stake in the No 2 petrochemicals firm, IPCL, to the nation's largest conglomerate by sales, the Reliance group.

The government plans to step up its privatisation drive in the months ahead, selling stakes in a metals firm, trading firm and two large oil companies and several other state-run firms.

India faces an uphill task of reining in its burgeoning fiscal deficit which is estimated at 5.7 per cent of GDP for 2001-02 (April-March).

The figure is close to double digits when coupled with deficits of state governments and losses of state firms.

Analysts say that is bad news for investors as global rating agencies have warned any deterioration in the fiscal situation could lead to a downgrade of India's sovereign rating, already at junk bond level.

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