India's finance minister Arun Jaitley told investors the government was open to the idea of privatizing loss making state-run companies and promised to pursue economic reforms and ensure a corruption free and fair business environment.
Jaitley also said the government was hopeful that long pending Insurance Bill would be approved by Parliament in the Winter Session and the government is examining changes to the stringent land acquisition law. “There are still a large number of companies which are almost on the verge of closure where people are going to lose employment,” Jaitley told the World Economic Forum's India Economic Summit. “Given a choice between them continuing in the present state and getting them privatized, the second would be a preferable option. Currently, they are being sustained merely on a government support. That is not a long-term solution. Taxpayers cannot pay for loss-making businesses.”
On July 22, Jaitley had told Parliament that the government plans to shut down four public sector companies and was trying to revive seven ailing companies through disinvestment and joint venture route. Since then, heavy industry minister Anant Geete has announced plans to shut down six state-run firms, including HMT watches, HMT Bearings, HMT Chinar Watch, Hindustan Photfilms, Hindustan Cables and Tungabhadra Steel. Making it clear that the government would not stop only at r a few “big bang” reforms, Jaitley said the effort would be to improve governance and end crony capitalism. “There is a lot that has to be done ... I am quite satisfied with the beginning we have made but it's a long journey,” he said, adding that “reform is the art of the possible.”
Since coming to power in May the government has taken several steps, including deregulation of diesel prices, to boost growth and revive sentiment. But it has faced criticism for the slow pace of reforms and its cautious approach. “Some people expect that the second generation of reforms in India really needs one or two big bang ideas that probably is not the answer.”
The minister said the government will take a fresh look at Land Acquisition law and some of its “illogical provisions.” “There are some illogical provisions (in Land Acquisition Act) like land cannot be used or acquired under this law for private hospitals and schools... There are some factors in it, which certainly require a re-look.”
Jaitley indicated that after coal and spectrum, other natural resources would be allocated in a fair and transparent manner through the auction route as the government moves to end discretion and crony capitalism. He cited the measures undertaken by the government to clean up the mess in the coal mines sector. The government has earlier said it would amend the MMDR act to allow auction of other minerals.
