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'We will miss privatisation target this year'

India said on Monday that it would miss its privatisation target for yet another year, but predicted future receipts would be healthier as a result of a new push to sell state assets.

"Of course, we will do badly in meeting this year's target," divestment secretary Pradip Baijal told a financial seminar.

The government had set a goal of Rs 100 billion through the sale of government equity in the financial year ending March 2001. Last year, the government raised just Rs 26 billion of its targeted Rs 100 billion.

But the official said that next year's privatisation receipts should be stronger.

"I'm sure with the preparation that has been done, the next year will be better," he said.

The Indian government has revved up its privatisation drive, announcing plans to sell off some of the crown jewels of the public sector as it struggles to tame the country's deficit and attract foreign investment.

Not important

Baijal attached little importance to missing this year's privatisation goal. "There is a budget and...a number has to be put there. It cannot be zero."

He added that in the "government's mind, there is no correlation between our performance and that number that had to be there in the budget because of the making of the budget".

Between 1991-92 and 1999-2000, India raised just Rs 183.94 billion ($3.93 billion) from privatisation against a target of Rs 443 billion.

Political dithering on privatisation and fear of upsetting powerful labour unions have been hurdles in the path of reform.

But analysts say India is now injecting speed and political will into the decade-old push to privatise state-owned firms.

Bids closed

Bids closed this month for the partial privatisation of national flag carrier Air-India and domestic airline Indian Airlines, which the government hopes to wrap up by the end of the fiscal year.

The government is also likely to close the sale this fiscal year of loss-making Hotels Corp of India, aluminium producer Bharat Aluminium Co Ltd and petroleum marketing firm IBP Ltd.

And earlier this month, a cabinet panel which decides on privatisation moved a step closer to selling India's largest car maker when it set up a panel of top officials to decide the best way to exit from Maruti Udyog Ltd, an equal venture with Japan's Suzuki Motors Corp.

The panel held off on privatising telecom firms Mahanagar Telephone Nigam Ltd and Videsh Sanchar Nigam Ltd, but government officials say their sale will be considered at the next meeting in December.

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