NEW DELHI, May 7: Finance minister Chidambaram, apparently under pressure from United Front's coalition partners and the left not to open up the insurance industry, on Wednesday said his government proposed to make a `modest' beginning by allowing private players in the health business.

"I hope to make a small beginning by allowing private insurance companies into the health sector. Let's see how it goes. One step at a time is what I believe is politically correct," Chidambaram said.

The communist bloc, comprising four parties in the United Front coalition, had minced no words in objecting to the 1997-98 budget proposal on opening up insurance. The finance minister also put up a brave front, saying the United Front government was not wary of increasing petrol prices since the petro subsidy had led to a five billion-dollar deficit. "We are not not scared. We have to prepare the people. Please remember the previous Congress government did not not correct petrol prices for two-and-a-half years.

The United Front government did so in July 1996. It is not easy to correct petroleum prices twice in a financial year," he said. On the issue of subsidy, which accounted for 14.4 per cent of gross domestic product, Chidambaram said people should know more about it.

"Let people debate which subsidies are justified, the kind of goods to be subsidised. I think once this debate takes place, we will be ready to make corrections," he said.

Chidambaram was referring to the white paper on subsidies, tabled in parliament on Tuesday. He said he was `serious' about disinvestment of public enterprises. "I have to raise 1.5 billion dollars this year through disinvestment," the finance minister said.

The third report of Disinvestment Commission was expected by this month- end. "I have to get cracking on that," he said. He said the communists were not against disinvestment as such. He clarified disinvestment was not only for raising money but was an instrument for public sector reform, adding that even profit-making enterprises require structural reforms. y

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.