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Introduction
Economic Situation
Key Objectives
Agriculture
Housing
Infrastructure
Small Scale Industry
Science & Technology
Banking
External Sector
Capital Market
Expenditure Management
PSU Reform
Revised Estimates
Budget Estimates
Indirect Taxes
Custom Duties
Direct Taxes - A
Direct Taxes - B
Closing StatementBudget 1998-99
Budget 1997-98
Budget 1996-97
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Public Sector Reform/Disinvestment/Privatisation
 | Government’s strategy towards public sector enterprises will
continue to encompass a judicious mix of strengthening strategic units, privatising
non-strategic ones through gradual disinvestment or strategic sale and devising viable
rehabilitation strategies for weak units. |
| The disinvestment programme of the Government draws primarily upon the
recommendations of the Disinvestment Commission. The Commission has so far submitted 8
Reports containing recommendations for 43 Public Sector Enterprises (PSEs). These
recommendations are in various stages of implementation. Government will be referring more
PSEs to it for its valued opinion. In 1999-2000, I propose to raise Rs.10,000 crore
through the disinvestment programme. This will help the Government to fund the
requirements of social and infrastructure sectors. Equally important, it will lead to
improvements in productivity and profitability of these enterprises and also to the
further development of domestic capital markets. |
| Government have been providing budgetary support to Central PSEs for
rationalising manpower under the Voluntary Retirement Scheme (VRS). However, such
assistance has generally been restricted to loss making enterprises. There are a number of
enterprises which are marginally profit-making and which need to reduce manpower to remain
viable but do not have the resource to finance such rationalisation exercises. Government
would encourage such enterprises to raise money from banks against Government guarantees
and interest subsidy. |
| In order to reduce the burden on budget on account of the implementation
of VRS, Government will also encourage PSEs to issue bonds to the workers opting for VRS.
Government will guarantee the repayment of such bonds and also reimburse fully the
interest payments. RBI will be requested to issue necessary instructions to banks to
accept bonds as collateral for loans to workers who may need assistance. |
| The need for timely and reliable statistics for policy formulation and
planning cannot be over emphasised. There is reason to believe that with progressive
dismantling of the system of economic controls, the quality of data flows has weakened.
Government has decided to establish a National Statistical Commission to critically
examine the deficiencies of the present statistical system with a view to recommending
measures for a systematic revamping of the system. |
| We stand today at the edge of the second millennium. We must, therefore,
prepare for the opportunities and challenges of the next century and millennium. It is
time to seriously debate and decide on the second generation reforms that we must put in
place to make India economically strong and fully capable of competing successfully in the
evolving world order. To further this process, I plan to bring a discussion paper before
Parliament before the end of this Budget Session. My goal is to help build a consensus on
the basic issues so that we can act more decisively to raise the growth in income, output
and employment in our economy to a higher, sustainable level. |
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