India's steel ministry supports a halt to the sale of stakes of two profit-making units under it, Steel Minister Ram Vilas Paswan said on Saturday.
"Manganese Ore India Ltd (MOIL) and Sponge Iron India Ltd (SIIL) are both profit-making companies and we have said they should not be divested," Paswan who took charge of the department this week told reporters.
He said in 2003/04 (April-March) MOIL made a net profit of 285 million rupees ($6.28 million), while SIIL had posted a 230 million rupees profit.
The previous government had begun the process of selling stakes in the two firms, which supply raw material to the iron and steel sector. The plan was to sell 59.8 percent in MOIL and the entire government stake of 98.7 percent in SIIL.
Prime Minister Manmohan Singh said earlier this week that new Congress party-led coalition government will abolish its privatisation ministry and generally not privatise profitable state-run firms.
Asset sales, which have picked up pace in the past two years, earned the last government 154 billion rupees ($3.4 billion) in the year through March 2004 and helped limit its fiscal deficit to 4.8 percent of gross domestic product.
The policy agenda of the new government, which is supported by left parties, has said privatisation will be on a selective basis and every effort would be made to modernise and restructure sick state firms.
Paswan who also holds the portfolios of chemicals and fertilisers, said the ministry will also urge the government not to put Hindustan Antibiotics Ltd, which makes life- saving drugs, on the disinvestment list. He said Hindustan Antibiotics could be revived by fresh capital investments.
Indian markets have been jittery ever since the Congress-led coalition came to power after rural voters and farmers, who felt left out of an economic boom, voted out the previous Hindu nationalist-led government.
"We have not taken any decision on disinvestment of loss making units under the ministry. If we can revive them, we will do it. Selling them will be the last option," Paswan said.
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