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Economy is recovering: Sinha
New Delhi: Finance minister Yashwant Sinha says the country’s
economy is recovering and the GDP growth rate in the current financial year will be 6.5 to
7 per cent. He said, however, that a structural correction in the government’s
finances is required to sustain growth.
Speaking at
an Economic Editors’ conference in New Delhi, he said barring the deteriorating
fiscal deficit, all other signs in the economy are positive. Industry is also showing
sustained growth, and there are clear signs of recovery in exports this year on the back
of a recovery in several Asian countries.
Mr Sinha said the government will bring a bill to regulate
non-banking financial companies, press for passage of the bill on a new revenue-sharing
arrangement between the Centre and the states and take a decision on the corpus of the
proposed Fiscal Facility Fund.
Gail disinvestment: Mr Sinha defended the
government’s decision to disinvest the 155 million shares in the Gas Authority of
India Ltd at Rs 70 per share. He also defended the decision to offer 6 per cent of the
total divested stake to Enron and British Gas, reiterating that no norms have been
breached and there was no distress sale.
Petro products: Petroleum minister Ram
Naik told the conference that the government plans to reduce subsidies on liquefied
petroleum gas and take a relook at the tariff structure of petroleum products. This will
include a review of the diesel prices by end-November. He said the oil pool deficit is
likely to swell to Rs 4,800 crore by the end of the current financial year if corrective
measures like reducing subsidies are not taken. Mr Naik also said unleaded petrol will be
available all over the country by March 2000.
IOC divestment: The government will sell
10 per cent of its holding in Indian Oil Corporation in the first quarter of 2000, Mr Naik
said.
Maruti stake sale: Heavy industry and
public enterprises minister Manohar Joshi said a portion of the proceeds from
disinvestment must be used to strengthen public sector enterprises. The funds
collected from disinvestment should not be used entirely to bridge fiscal deficit, he
said. He also added that the government is not thinking of selling its equity in Maruti
Udyog.
Mr Joshi added that the government has drawn up a plan for
public sector enterprises which is a mix of strategic sale, privatisation through gradual
disinvestment or strategic sale, and viable rehabilitation programmes for weak units.
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Desu to be restructured
New Delhi: The Delhi state government is restructuring the Delhi Electric
Supply Undertaking with a view to finally privatising its operations. It is likely to
entrust the restructuring work to SBI Capital Markets.
The restructuring will cover generation, transmission and
distribution of power by Desu. It is expected that three separate companies will be
created to handle each of these activities.
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Bank of Madura to invest
in venture fund
Chennai: Private sector Bank of Madura is planning to invest $3 million
in Chrysalis Capital, a US-based venture capital fund. The bank’s chairman K.M.
Thiagarajan said this is the first time an Indian bank is investing in a fund abroad.
Chrysalis Capital is promoted by Ashish Dhawan, formerly
of Goldman Sachs, and Raj Kondur of Morgan Stanley. It caters to Indian information
technology industry. The fund will be brought to India by Gurucharan Das, former chief
executive officer of Procter & Gamble, and Saurabh Srivastava, chairman of IIS
Infotech, who are investors in the fund.
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Centurion Bank plans
for insurance business
Mumbai: Private bank Centurion Bank has firmed up plans for business in
the life insurance sector. The bank has a tie-up with Canada Life to write life insurance
policies, pensions, annuities and segregated funds in India. Canada Life earlier had a
memorandum of understanding with 20th Century Finance Corporation, whose
businesses were merged with Centurion Bank in 1998.
Canada Life’s chief marketing officer Jim Connolly
says a joint venture company may be set up to sell insurance products to Centurion Bank
customers.
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