Author: Aaron Chaze



By Aaron Chaze



Not for sale: India’s farmers are resisting land acquisitions

India’s government is forging ahead with its privatization program and has asked various ministries for a list of companies that could be considered for disinvestment— either by raising fresh capital or by liquidating a portion of the government’s stake. In late 2009 the government clarified which companies could head to the auction block, stating that any state-owned company with three years of profitability and dividends could be disinvested. In cases of companies that are already publicly listed, the nongovernment holding should be more than 10%. Ten listed government companies and 50 unlisted companies meet these criteria, including National Thermal Power Corporation, Steel Authority of India and water utility Satluj Jal Vidyut Nigam.


Indian businesses may no longer suffer from a capital shortage, but they may face worsening electricity capacity constraints. A protest by farmers over land acquisitions— as well as bureaucratic delays—may slow down the development of new nuclear electricity plants. The Nuclear Power Corporation, a state-owned monopoly that controls all of India’s nuclear power plants and generates 4,120 megawatts of electricity, has warned that the nuclear power generation target of 40,000 MW by 2020 is unlikely to be achieved and will more likely be achieved by 2035. The Indian government has already approved land grants for GE Hitachi, Westinghouse, Atomstroyexport and Areva for construction of nuclear reactors with up to 10,000 MW capacities. However, land acquisitions have run into problems, and legislation in India needed to limit liability of foreign companies has not yet been introduced.


Mobile telecom is one sector where timely growth does not seem to be a problem. For the month of October 2009, Indian wireless companies added the highest number of net new subscribers ever, at 16.7 million. This represents a growth rate of 11% monthon- month. Tata Teleservices alone added 3.9 million net new subscribers. Vodafone and Aircell have also produced their best additions ever, with 3 million and 2 million net new subscribers.