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Privatisation drive needs review: Fernandes

Defence Minister George Fernandes said on Thursday a mid-term review of the country's privatisation drive was needed.

"I am seeking a review of the privatisation process," Fernandes told a news conference. "My view of divestment is that a mid-term review is needed and course correction steps, if needed, should be taken."

India's privatisation programme has been facing opposition within and outside the ruling coalition. The drive stalled in September when the government postponed sales of stakes in two oil firms, Hindustan Petroleum Corp and Bharat Petroleum Corp for three months due to a Cabinet rift.

Shares of state-run firms fell on the minister's remarks with HPCL losing as much as 2.5 per cent to Rs 201.70 and BPCL shedding 0.5 per cent to Rs 183.75.

Fernandes' comments come despite a recent vow by Prime Minister Atal Bihari Vajpayee to press ahead with sales of stakes in state-run firms.

The socialist Samata Party, which Fernandes represents, is a key member of the ruling coalition. It believes the privatisation process must not lead to the emergence of private monopolies.

India has said it hopes to raise Rs 12, 000 crore (Rs 120 billion) through stake sales in state-run firms in the fiscal year ending March.

Fernandes also denied media reports that a meeting had been set for November 19 to try to end the deadlock over privatisation.

"As far as I am concerned, I am not aware of such a meeting," he said.

He said he would present his views on the subject to the government soon.

A member of the ruling coalition said on Wednesday that Deputy Prime Minister Lal Krishna Advani would convene a meeting of senior ministers to try to resolve differences over the divestment programme before Parliament opens next week.

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