India to raise more than a billion dollars through sell-off: finance minister

India plans to raise more than a billion dollars in fiscal 2005-2006 by selling state-run companies, Finance Minister Palaniappan Chidambaram said announcing his government's privatisation plans for the next financial year. Though there were no targets, he told the BBC he expected to garner 50 billion to 70 billion rupees (1.1 billion to 1.5 billion dollars) during the financial year starting April 1, once the cabinet cleared the names of companies he planned to put up for sale.
In presenting his budget last week, his second since a left-leaning Congress-led government took office in May, Chidambaram made no mention of his privatisation plans and said he had left them out of his speech purposely.
"(Disinvestment) is off-budget now," the Press Trust of India news agency quoted Chidambaram as telling the BBC.
"I just have to raise (funds through privatisation) over a period of time. So this gives us much greater flexibility."
It would also help the government scout for the best price in the market, he said, adding that there would now be no artificial pressure to raise the money by March 31 every year.
Proceeds from the sales would go into a "corpus fund" which would be invested in public sector mutual funds to enable the government to earn returns on it, the minister added.
"This fund has been set up and we have a list of companies that will have to be approved (for privatisation) by the Cabinet Committee on Economic Affairs."
Chidambaram, who has faced stiff opposition from India's left-wing parties to the privatisation of state-owned companies, said the returns would be deployed in public sector spending.
In their common policy document, the Congress and its allies, including the left-wing parties who are providing crucial outside support, pledged not to sell off "profit-making state-run units."
"All privatisation's will be considered on a transparent case-by-case basis," the document said.
Successive finance ministers have in the past announced privatisation targets in their budgets but in most cases missed the deadlines to raise the money.
Chidambaram said the budget had "not strayed" from the path of reform, launched in 1991 by then finance minister Manmohan Singh. Singh now heads the Congress-led government as prime minister.
"We have not strayed from the path of reforms... We will try to get some external audit to measure the outcome of major programmes," Chidambaram said.
He said most Indians were happy with his budget proposals, including industry which thought it was "pro-growth." "My party is happy and my alliance party is happy."