He also hailed as historic a ruling by the Supreme Court asking the government to get the parliaments approval before selling stakes in Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (HPCL).
It has been decided that IOC, ONGC and Gail will remain the flagship companies, Ram Naik told reporters at a press conference. The government will have more than 51 per cent shares and that is not going to be privatised.
IOC is the countrys largest refiner and the biggest by revenue, ONGC is Indias largest crude oil producer and Gail its largest gas retailer. HPCL and BPCL are Indias third and fourth biggest refiners.
Fund managers said the court verdict was a setback to the governments privatisation programme, causing the two cash-rich refiners shares to dive in a buoyant market. The decision has gone against the government. We have accepted the decision, Mr Naik said.
We will have to stop this process till the next parliament session, which will be in December. In the meantime, we will study the issue and decide what can be done.
He said the verdict would not hamper plans to sell stakes in other state-run companies.
The government has an ambitious plan to raise Rs 132 billion ($2.88 billion) in the fiscal year to March 2004 from selling stakes in state-run companies. HPCLs shares ended down 11.6 per cent at Rs 344.90 after plummeting 16.4 per cent immediately after the mid-morning court decision.
BPCLs shares which initially skidded 13.7 per cent, recouped most of their losses to end down 2.1 per cent at Rs 323.35.
In contrast, the top-30 BSE Sensex rose 1.93 per cent, while the benchmark index of state-run company shares rose 1.6 per cent.
This index has risen 81 per cent since the start of the year on expectations the government will follow through on several asset sales.
If the government goes to parliament for approval, the privatisation will not happen as the BJPs coalition partners are unlikely to vote for the sell-off, said Jayesh Shroff, a fund manager at BOB Asset Management.
The BJP, short for Bharatiya Janata Party, is the largest group in the ruling coalition government. (Reuters)