Budget steam for selloff spree
Balco runs into missile production role hurdle
Left & Sinha march to same tune
Tricolour too hot for couture
Calcutta Weather

 
 
BUDGET STEAM FOR SELLOFF SPREE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, March 1: 
Pumped up by a feel-good wave, finance minister Yashwant Sinha tod-ay pledged to press ahead with an ambitious privatisation programme, the most trouble-prone proposal in his budget, at “any risk whatsoever”.

“We have looked at all aspects carefully during budget-making and we have decided to go ahead with the privatisation of public sector units. Let there be no doubt on this count in anybody’s mind,” he told captains of industry at a meeting on the budget.

Sinha made it clear that non-strategic public enterprises would be privatised whether they are making profits or losses. “The time has come to address forthright the privatisation issue and meet the challenges of vested interests,” the minister added.

His blunt assertion came on the eve of a nationwide protest by trade unions against the proposals for an exit policy and privatisation of 27 companies.

Privatisation is a sensitive issue with potential to create friction within the ruling coalition. Railway minister Mamata Banerjee, who had ignored the finance ministry’s advice to raise passenger fares and had stayed away from the capital when the general budget was presented, today chose not to comment on Sinha’s package but authorised her party spokesman to do so.

Mamata, however, denied that she was upset with the budget and said she had left for Calcutta to draw up her party’s Assembly poll programme.

The finance minister is banking on raising as much as Rs 12,000 crore from the privatisation programme. Sinha’s address was also intended at allaying scepticism on whether he had pitched his target too high, especially since the government’s accomplishment this year has been wide of the mark.

However, he told the meeting convened by the Federation of Indian Chambers of Commerce and Industry (Ficci) that the disinvestment target of Rs 12,000 crore for the coming year was “credible” and that it had been set after much deliberations.

Basking in the warmth of industrialists who are yet to stop applauding his budget, Sinha said: “I am happy that they are happy”.

Stating the second generation of reforms has been put on track, Sinha conceded that the path is slippery, but pinned faith on Indian business.

He said the business community and the government must take the working class into confidence on the amendments to the Industrial Disputes Act and the introduction of contract labour. The workers must be assured that the changes will multiply employment opportunities and will not go against their interest, he said.

Cheap funds ripple

Sinha’s push for lower interest rates made headway today with the Reserve Bank (RBI) responding by slashing the bank rate — a key signalling device and the rate at which it lends to banks — by half a percentage point to 7 per cent.

The finance minister had yesterday set the ball rolling by reducing the interest rate on small savings schemes. The RBI move triggered a flurry of cuts in banks’ prime lending rate (PLR) — the rate at which they lend to their most preferred clients.

The ripples of the budget reached elsewhere, too, with more carmakers cutting prices following the lowering of excise duty. Maruti, Daewoo, Ford and General Motors today announced price reductions.

The stock market also opened on a high note after yesterday’s surge but lost some steam later. At one point, the Bombay share price index shot up by as many as 139 points. However, it ended the day with a gain of only 25 points over yesterday’s close as some investors sold technology shares for short-term gains.

   

 
 
BALCO RUNS INTO MISSILE PRODUCTION ROLE HURDLE 
 
 
FROM JAYANTA ROY CHOWDHURY
 
New Delhi, March 1: 
The opponents of the sale of Bharat Aluminium Company (Balco) have found more fodder. The public sector unit possesses technology that was used in the country’s nuclear and defence projects — its sale would thus go against the nation’s “strategic interests”.

Through the 1990s, Balco’s research metallurgists worked on a top secret project along with scientists from the Defence Research and Development Organisation (DRDO) and the Indian Space Research Organisation (Isro) to develop special lightweight aluminium alloys.

These were used in India’s nuclear armaments, the Prithvi and Agni series of intermediate missiles and for rocket components.

When India tested nuclear bombs in 1998, Balco supplied the casings. It also makes and supplies the fuel tanks for Agni and Prithvi missiles as well as an alloy codenamed Afnor 7020 used by Isro in its rockets.

Documents show that Balco is bound by a supply and production agreement with the Department of Defence Supplies to keep this technology secret. Sale of majority stake in Balco to a private sector company would violate this agreement.

As part of the agreement — S.No 1(3)/90/T(S1)/CPO(VG)-1645 — Balco is bound to keep secret the alloy knowhow. Also, the agreement swears to secrecy not only the metallurgists who helped develop the alloys but also all scientists, engineers, other officers and technical hands who came to know about the technology, its use or manufacture.

It is argued that selling Balco to the private sector could result in the technology being leaked to outsiders. The corollary being that Balco has to remain in the public sector.

The clauses were inserted in the pact as the technology Balco has jointly developed makes India one of the few nations and possibly the only Asian country besides China to possess such knowhow.

The work on these alloys did not fetch much money but was done because the defence ministry had picked Balco as its strategic partner. There were two reasons why Balco was selected and not Nalco, the other public sector aluminium major.

First, Balco has a hot roll aluminium mill, needed to cast these alloys. Second, the location of Balco’s plant — at Korba in Chhattisgarh — makes it safe from possible missile attack by Pakistan and China, the plant being some thousand miles distant from both the countries. It is also far from the coast, which rules out a surface-to-surface missile attack from an enemy ship.

The technology that Balco developed is considered complex and difficult to replicate. None of the countries that India approached to buy it from — France and Russia among them — was willing to sell either the technology or the product.

The fact that Balco is privy to such a technology makes it a strategic company, argue many. The BJP government’s stated policy is to sell only non-strategic PSUs, not strategic ones.

Trinamul Congress chief Mamata Banerjee is believed to have raised this point in a letter to Prime Minister Atal Bihari Vajpayee after the Union Cabinet cleared a proposal last year to sell 51 per cent in Balco to a private partner. Vajpayee had reportedly fought shy of a direct answer.

   

 
 
LEFT & SINHA MARCH TO SAME TUNE 
 
 
BY A STAFF REPORTER
 
Calcutta, March 1: 
The resemblance is hard to miss. Between the budget presented by a BJP finance minister and the manifesto released by the Left Front in Bengal today, the only difference is that the first calls it disinvestment and the second describes it as taking “private help”.

In the budget, finance minister Yashwant Sinha spoke of downsizing government to cut expenditure. In the manifesto, signed by among others Jyoti Basu and chief minister Buddhadeb Bhattacharjee, the Left commits itself to slashing expenditure through “effective means”. “Downsizing” may be too harsh a word, as “privatisation” is, to be put in a manifesto. But the underlying message — from saffron Delhi to red Calcutta — is the same: smaller government.

The Front has said the government is encouraging private initiatives to revive closed and sick units under its ownership.

It claims to have already succeeded in lowering the dependence of state-owned sick industries on overstretched public funds. The promise is to turn these industries into profit-making enterprises and further reduce government assistance.

   

 
 
TRICOLOUR TOO HOT FOR COUTURE 
 
 
FROM CHANDAN NANDY
 
New Delhi, March 1: 
Is haute couture’s loss the nation’s gain? The tricolour may not flutter from beautiful bodies any more. Or cling to them.

The government will unfurl a new “flag code” in March-end that will restrict the use of the tricolour to “proper” places — flagpoles and official buildings, and not sculpted bodies like Malini Ramani’s.

The fashion-designer daughter of Delhi-based socialite Bina Ramani had sashayed down the ramp wearing the tricolour as a cocktail dress last August, deeply offending government sensibilities.

Following the controversy it sparked, a Central committee is ready to submit a report on the “correct” use of the national flag at the end of this month. The panel has prevention of the “vulgar” display of the flag high on its list of priorities.

Headed by Union home ministry additional secretary P.D. Shenoy and comprising joint secretaries from the ministries of defence, external affairs, legal affairs, culture and consumer affairs, the committee was formed last November.

Its brief was to examine the “use/display of the national flag, including the extent to which unrestricted or liberal use of the flag by members of the public” may be permitted.

The committee will also look into the advisability of enacting a separate law governing the display and use of the tricolour, besides making suggestions on the “prescriptions for the use of the country’s state emblem and the mechanism for enforcement of the prescriptions”.

It was learnt that the committee would recommend a mix of “reasonable restrictions” and “liberal” use of the tricolour.

But punishment for wearing the flag as bikinis or other abridged forms of the tricolour is still being discussed. The panel intends to hold three more meetings before taking a final view on the subject, though some other countries seem to be more tolerant of the uses of their national flag. The Stars and Stripes makes for popular beachwear.

Official sources in Delhi said it was purely to prevent such “insults” to the flag as the Ramani episode that the “reasonable restrictions” would be imposed.

The “Flag Code-India” lists orders issued by the government from time to time and contains detailed instructions with regard to the shape, size, colour of the flag, the “correct” display, instances of misuse, display of the Tricolour on national days and on special occasions.

The committee may recommend doing away with existing laws governing the use and display of the flag, under which the penalty for insulting the Tricolour is not stringent.

The hoisting and use — including misuse and insult — of the flag is governed by provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950, and the prevention of insults to National Honour Act, 1971.

   

 
 
CALCUTTA WEATHER 
 
 
 
 

Temperature

Maximum: 30.6°C (0)
Minimum: 21.3°C (+3)

Rainfll

13 mm

Relative humidity

Max: 96%
Min: 58%

Today:

Mainly cloudy sky. Possibility of light rain in some parts. Minimum temperature likely to be around 20°C.
Sunrise: 6.02 am
Sunset: 5.35 pm
   
 

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