Economic Survey 2000-01 admits economy slowdown
New Delhi: The pre-budget Economic Survey for 2000-2001 has admitted that there are ``identifiable gaps'' in the ongoing economic reform process, which have impacted the long-term growth performance of the economy. The Economic Survey, 2000-01 presented to the parliament by Mr. Yashwant Sinha, union finance minister, has acknowledged that the economy is now at ``a difficult stage and some problems of growth are likely to be faced in the coming year''.

The Survey has noted that because of irregular rainfall for the second consecutive year, agricultural growth has been low or absent in 2000-01, while industrial growth appears to have drawn-out with the sentiment for new investment not showing any improvement. The Survey says that ``measures need to be taken to instil confidence in the economy so that growth momentum of the 1990s could be recaptured'.

It said that real GDP growth rate in the current fiscal is estimated at 6 per cent against a growth rate of 6.4 per cent in 1999-2000. A tentative assessment of the balance of payments (BoP) for the current year reveals that the current account deficit might widen to about 1.5 to 1.7 per cent of GDP compared to 0.9 per cent in 1999-2000.

The survey has put forth drastic measures such as reallocation of a significant portion of central capital expenditure, through sale of all public sector units producing private goods, expenditure control by minimising wasteful expenditure and reallocating funds to public goods, infrastructure and social welfare and conversion of government departmental enterprises into companies to curtail excess manpower. It has singled out abolition of reservation for small-scale sector (SSI) and power sector reform as issues of immediate priority for action.

For full text of the Economic Survey - 2000-2001. Click here
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BALCO deal likely to be put on hold
New Delhi: Bowing to mounting opposition pressure, the government has hinted that BALCO disinvestment, the largest of disinvestment deals to be entered by the government so far, may be put on hold, with a parliamentary discussion on its sale scheduled on March 1.

Mr. Arun Shourie, minister for disinvestment has said that all documents on the proposed sale of the public sector aluminium giant to Sterlite Industries would be placed before the Comptroller and Auditor-General (CAG) to prove that the deal was struck in a transparent manner. A committee of secretaries had earlier vetted the deal, after evaluation by senior officials of four ministries and an international consultant.

He said the evaluation committee had suggested a sale price ranging between Rs 275 crore and Rs 494 crore and that BALCO had received two bids - one from HINDALCO for Rs 225 crore and Sterlite for Rs 551 crore. The government had, therefore, accepted the second bid.

Mr. Shourie has also disputed reports that BALCO had made Rs 110-crore profit this year. He said during the period of four years, in which the process of disinvestment in BALCO had been going on, its profits had actually dwindled from Rs 163 crore in 1996-97 to Rs 25 crore in 2000-01. He said that the disinvestment decision had been taken ``entirely in consonance'' with the Disinvestment Commission recommendations in its fifth report, which had stated that the government could consider offering 51 per cent or more to a buyer or a strategic partner.
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