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India postpones Cabinet meeting on privatisation to Feb 1

A crucial meeting of India's Cabinet Committee on Divestment scheduled to be held on Tuesday has been postponed to February 1, a spokesman at the prime minister's office said.

"The Cabinet committee meeting has been postponed. It will take place on February 1," the spokesman said, but did not give any details on why it was cancelled.

The meeting had been expected to discuss about three or four privatisation proposals including one to cut the government's stakes in overseas telecom firm Videsh Sanchar Nigam Ltd (VSNL) and information technology firm CMC Ltd.

The government has been on a push to inject speed and credibility into its decade-old privatisation drive which has consistently failed to meet targets.

The divestment department is overseeing the sale of government stakes in 30 state-run firms spanning a variety of sectors from airlines to hotels and metal firms.

Last week, Divestment Minister Arun Shourie said the government planned to sell about 7 per cent of its stake in state-owned VSNL as part of a phased move to privatise the company, which is due to lose its monopoly on overseas telephony in 2002.

The government owns 53 per cent of VSNL, which is also the country's first and largest Internet access provider with more than 550,000 customers.

He said the government's aim was to eventually cut its stake to 26 per cent in VSNL, one of India's most cash-rich firms with no debt on its books and reserves of Rs 35-40 billion.

Set up in 1976, CMC is one of India's leading system integrators and has expertise in hardware maintenance, real-time on-line systems, transaction processing, image processing and data communications.

The government holds over 80 per cent of the firm and plans to bring its stake down to 26 per cent.

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