Core Sector Definition To Be Reworked

The industry ministry will seek cabinet clearance for a reclassification of the core and non-core sectors, industry minister Murasoli Maran has said in an interview to Business Standard.

So far, the ministry has been stating that the United Fronts common minimum programme followed the classification of core and non-core sectors mentioned in the second five-year plan. But, cement was deprived of the core sector status as the economic justification for the governments presence in the sector became redundant. The issue of classification has risen with the Disinvestment Commission seeking clarification on the definition of the core and non-core sectors after the cabinet recently cleared the ministrys proposal to hike the divestment ceiling to 74 per cent.

 

The formal classification will help the commission to determine the level of disinvestment in individual PSUs, keeping in view the sectoral ceilings.

Maran said that sectors were being evaluated for further delicensing. However, he ruled out immediate delicensing of the sugar and liquor sectors. Sugar will not figure again on the delicensing list since the ministry could not push it through on two previous occasions. Discussions on liquor delicensing were being deferred in deference to nationalist sentiments, since it would not be politically correct to talk of delicensing the sector in the 50th year of independence. Besides, liquor is not a priority area, the minister said.

He, however, confirmed that the ministry was examining delicensing areas like chamois leather and explosives. Delicensing of explosives, particularly industrial explosives, can be considered, but it would have to be done with caution, Maran said, adding that the ministry was only conducting preliminary studies in shortlisting the potential sectors at this stage.

On the contrary, delicensing the chamois leather sector would have little benefit other than to signal the governments positive intent since the sector carried less than one per cent weightage in industrial production.

Excluding consumer electronics, which was delicensed recently, 14 sectors, primarily in defence and environmentally hazardous sectors, are currently under compulsory licensing.

The ministry is also taking up the proposal for a Tariff Commission.

The three-member body will be autonomous and the Bureau of Industrial Costs and Prices (BICP) will not be upgraded into the proposed commission, Maran said.

Ruling out total dereservation of the SSI sector at this stage, Maran said, A wide-ranging discussion will be essential before the Abid Hussain Committee report is adopted.

On the recent demand by 40-odd PSU chiefs that the government divest management control in them besides freeing them Parliament and Comptroller and Auditor Generals (CAGs) purview, Maran said, To me, that amounts to freedom, not autonomy. Autonomy means an arms-length relationship between the government and PSUs.

He also dismissed the possibility of government further divesting Maruti Udyog Ltd (MUL) stake in favour of Suzuki.

We have written to them that we will be exercising our option to appoint the managing director, Maran added.

Denying media reports that he would be meeting Prime Minister H D Deve Gowda in connection with the controversial Tata-Singapore Airlines joint venture proposal, the minister said that the matter now rested between the Prime Minister and civil aviation minister C M Ibrahim.

The policy permits up to 40 per cent foreign equity, based on which the proposal was approved. However, I will not unduly push any specific proposal, the minister said.