New Delhi, October 7
The logjam over the disinvestment of public sector undertakings has transcended beyond economic attributes of a structured privatisation process and has only helped in engineering a vertical split in the country’s political establishment.
Significantly enough, the debate had started gathering heat only after the ascendancy of Mr L.K. Advani to the post of Deputy Prime Minister and in the process raised more than audible murmurs about the diminishing authority of Prime Minister Atal Behari Vajpayee in the establishment.
At one point of time, matters reached a point where there were strong indications of Disinvestment Minister Arun Shourie resigning from the Council of Ministers ostensibly in protest against the roadblocks created by the ‘anti-reformists’ in the disinvestment process.
Disinvestment of the PSUs has long been projected as one of the major ‘success stories’ of the NDA regime until Mr Shourie and his team put their hands on two ‘jewels’ — Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL).
Petroleum Minister Ram Naik, who has all along been championing the cause of not privatising oil sector PSUs, found his perfect foil in the rather vociferous HRD Minister Murli Manohar Joshi and Defence Minister George Fernandes.
While Dr Joshi, a vocal proponent of the Swadeshi brigade, called for a review of
the
disinvestment policy of the government, Mr Fernandes raised objections to it on security considerations. The Defence Minister’s contention was that if the management control of the oil sector PSUs was handed over to a strategic partner, it could open up the possibility of an oil stock crisis during the times of an external crisis.Even though he claims that in principle he is not against the disinvestment of the PSUs, he questioned the route of directly offloading the government equity in favour of a strategic partner.
The debate, which was lying dormant for quite sometime after the CCD had given approval in principle to divesting government-equity in the HPCL and BPCL earlier in the year, was sparked off by a letter written by Mr Fernandes to the Prime Minister calling for a review of the disinvestment programme.
Subsequently, the thread was picked by other ‘anti-reformists’ and soon the debate over disinvestment occupied political centrestage.
Mr Shourie himself minced no words in hitting out at those who were against disinvestment. “The difficulty is that in a fragile and fractured polity and legislature, squalls of this kind may make all the difference. The disinvestment programme has run into a spot”, he had said.
The crucial meeting of the Cabinet Committee on Disinvestment (CCD) on September 7 was preceded by hectic confabulations among all warring parties. The Prime Minister himself intervened convening a series of meetings to end the impasse. Petroleum Minister Ram Naik armed himself with a 20-minute presentation articulating the argument against the privatisation of the HPCL and BPCL. The CCD meeting on September 7, which was earlier scheduled to be held on August 27, had decided to defer the process by three months.
Even before the HPCL, BPCL issue could die down, firebrand BJP leader and Coal and Mines Minister Uma Bharti started crying foul over the proposed disinvestment of NALCO. And perhaps emboldened by the anti-disinvestment brigade’s success in derailing the oil sector privatisation, Fertiliser Minister Sukhdev Singh Dhindsa has aired his reservations on the proposal to disinvest National Fertilisers Limited (NFL).
Mr Dhindsa has already accorded a “strategic” status to the NFL and written to the Prime Minister about the importance of retaining government management control in the NFL.
And in a volte-face of sorts, the Defence Minister said on Saturday that the deferment period of three months was long enough and a decision needed to be taken at the earliest.
Mr Fernandes’ remarks came on the same day the Prime Minister, as Chairman of the Planning Commission, approved the 10th Five Year Plan, which involves, among other things, the implementation of an ambitious disinvestment programme of Rs 78,000 crore during the five-year period.
Effectively, this averages to netting Rs 16,000 crore a year from disinvestment proceeds. On the face of it, it appears more of a pipedream. However, elementary data-crunching reveals that there are about 160 ‘non-strategic’ PSUs and divesting 50 per cent government holdings in these would yield approximately Rs 78,000 crore.
