Geography Reference
In-Depth Information
state-owned insurance companies staged a one-day strike to protest the
introduction of legislation to privatize the insurance sector and open it to foreign
investment.
Throughout the decade, each instance of government officials affirming their
intentions to privatize was met by organized resistance and then followed by a
quick announcement of policy reversal by political leaders. As a consequence,
the governments' aspirations to raise hundreds of crores through sales of public
assets have been largely unrealized (see Table 2 ). As of mid-2000, the
government had managed to reduce its equity in approximately 39 of the 240
central public enterprises, but had successfully sold a controlling stake, or a
percentage in excess of 51 per cent, in only two units. BALCO was slated to
become the third. In seven of the past nine years, the government failed to reach
the target for revenue through privatization that it established at the outset of
each year.
The Strained Disinvestment of BALCO
The privatization of India's Bharat Aluminium Company Limited, the country's
third largest aluminum producer located in the newly created state of
Chhatisgarh, is emblematic of the high political hurdles that the government
faces in privatization and the joint role that labor and political
TABLE 2 DISINVESTMENT IN PUBLIC SECTOR UNDERTAKINGS
Source: Ministry of Finance, Government of India, 'Economic Survey, 2000-2001'.
opposition play in forestalling disinvestment. What the central government's
Ministry of Disinvestment intended as a model of the disinvestment process that
would inaugurate a string of other large disinvestment plans instead turned into a
two-year, highly contentious episode that involved opposition political parties,
labor unions, the state government of Chhatisgarh, the Supreme Court, several
central government ministries, and accusations that the disinvestment betrayed
the constitutionally-protected rights of the tribal residents and workers of
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