India: Privatization takes a small step forward
The first good news for Indian privatization this year came in early October. The government announced the sale of two small companies. A 51% stake in CMC, a software company, was sold to Tata Sons, which owns Tata Consultancy Services, India's biggest software exporter, for Rs1.5 billion ($31 million).
A 74% stake in Hindustan Teleprinters sold to Himachal Futuristic, a local telecom company, fetched another Rs550 million. On October 23, the cabinet cleared the sale of three more companies including two that run several hotels. The bids will be out in November.
For Arun Shourie, India's minister in charge of privatization, these are minor victories in the long battle ahead. Of the Rs120 billion the government hoped to raise this fiscal year from privatization, it has netted just Rs2.07 billion in the first seven months. Early this year Shourie fought a pitched battle in parliament and against irate unions to push through the privatization of Balco, an aluminium company.
A cabinet reshuffle in September elevated Shourie to cabinet rank while two of his colleagues in key telecom and civil aviation ministries, who were opposed to privatization, were unceremoniously dumped. That seemed like a decisive political victory for privatization.