10 june 2000

government may sell its stake in vsnl, mtnl
new delhi: as part of its disinvestment plant, the government will privatise both its blue chip telecom public sector undertakings, videsh sanchar nigam ltd and mahanagar telephone nigam ltd by bringing down its stake to 26 per cent. at present the government owns 56 per cent stake in mtnl while the government’s holding in vsnl stands at 54 per cent. a decision to this effect is likely to be taken at the the next meeting of the cabinet committee on disinvestment scheduled to be held on june 23.

the core group of secretaries on disinvestment had already recommended further disinvestment of the government equity in the vsnl and mtnl. it had also pointed out the need to induct a strategic partner in mahanagar telephone nigam. the group was of the opinion that in face of the stiff competition to mtnl from the private sector, any delay in the induction of strategic partner would adversely affect the realisation from the disinvestment of the government equity in the company. 

department of telecom services (dts) which is the service providing arm of the communications ministry has, however, opposed to further disinvestment in mtnl and vsnl. it has also opposed the proposal of doing away with the monopoly of the vsnl before 2004. 

dts pointed out that it would be unfair and against the interest of the investor to consider the monopoly issue of the vsnl over international long distance telephony by 2002 against 2004 assured earlier.

9 june 2000

rupee settles down after intra-day high, as rbi talks tough
mumbai: in a tough move to control the rupee from going out of control and collapsing against the dollar, the reserve bank of india banned banks from holding speculative dollar positions and ordered them to square their positions. this move came as the rupee sank against the dollar in the morning to touch an intra-day low of rs. 44.95/96. the rbi intervention lead to a marginal recovery in the value of the indian currency and it finally finished at rs. 44.74/76.