[Marxism] neoliberalism suffers setback in India

[Dbachmozart@xxxxxxx]

India Abandons Plan to Sell Stakes in State-Owned  Companies

By _SARITHA RAI_ (http://query.nytimes.com/search/query?ppds=bylL&v1=SARITHA
RAI&fdq=19960101&td=sysdate&sort=newest&ac=SARITHA RAI&inline=nyt-per)

Published: August 17, 2005

BANGALORE, India, Aug. 16 - In a setback to India's privatization program,
the government said Tuesday that it had abandoned plans to sell stakes in more
than a dozen profitable state-owned companies.
Buckling under pressure from its leftist allies, the government of Prime
Minister Manmohan Singh scrapped plans made by the previous administration to
shed parts of several state companies. The left-leaning parties are afraid even
partial privatizations would lead to huge layoffs and they had threatened
nationwide protests if the government went ahead with the sales.
In a statement to Parliament, the finance ministry said the Congress Party
coalition government would abide by its agreement with left-wing parties, whose
 support it needs, and would not sell profitable government companies.
Under the socialist self-sufficiency agenda set out after independence from
Britain, the Indian government ran a variety of companies that made everything
 from steel to software. But under a program accelerated by the previous
administration, the government sold majority stakes in companies like Maruti
Udyog, India's largest carmaker, and _Videsh Sanchar Nigam_
(http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/ny
t-com/html-companyprofile.asp&symb=VSL) , an overseas long-distance and
Internet service provider. The government decided then to retain control of only
those companies in sectors considered strategic, like energy.
But the government still owns about 200 companies that do everything from
prospecting for gold to making fertilizer. Among the companies that were
scheduled to be sold were the National Aluminum Company and the Shipping
Corporation of India.
Finance Minister Palaniappan Chidambaram said Tuesday that the government
would not conduct strategic sales of any state-owned company, referring to the
method used by the previous administration. "I believe strategic sale is no
longer the right approach," news services reported Mr. Chidambaram as telling
reporters in New Delhi. "It raises more questions; it is not transparent."
In a strategic sale, potential buyers are selected beforehand and allowed to
bid, as opposed to open competitive bidding.
The decision to discard the privatization agenda is expected to slow economic
 overhaul efforts and affect the flow of foreign investment into India. The
government has a budget deficit close to 5 percent of the country's gross
domestic product. The government needs money to fulfill its electoral promise to
upgrade rural infrastructure like roads and electricity projects, and provide
 jobs.

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