New Delhi, May 26
The UPA government’s first big-ticket disinvestment proposal got off the block today with the Union Cabinet giving its seal of approval to offload 10 per cent equity in Bharat Heavy Electricals Limited (BHEL).
The decision carries the potential of snowballing into a major contentious issue, with the Left parties airing their opposition in no uncertain terms.
Finance Minister P. Chidambaram, however, maintained that the Left was “consulted” before the Cabinet arrived at the decision. “The Left has been consulted in the matter,” he said.
This was stoutly denied by the Left parties, which is propping up the Congress led UPA government from outside.
“We were not consulted... this decision is against the letter and spirit of the national common minimum programme (NCMP),” said the CPM Politburo member Ramachandran Pillai said, adding that the party would take the matter to the “people’s court”.
Both CPI and CPM strongly opposed the Cabinet decision and demanded that the Manmohan Singh government reconsider the move.
“In the light of the commitments made in the NCMP, the CPM considers this Cabinet decision to be directly contradictory,” the party Politburo said in a statement.
It quoted the NCMP as “clearly stating that the UPA government will encourage and strengthen the navaratnas to become global players. The NCMP also categorically states that the government shall not disinvest/privatise the profit-making public sector undertakings”.
“This reckless disinvestment of one of the navaratnas amounts to undermining the position of the PSU. This will also mean privatisation through the backdoor,” D Raja, CPI National Secretary, said.
At present, the government holds 67.72 per cent equity in BHEL and the balance 32.29 per cent is held by the public and institutions.
The disinvestment of 10 per cent equity in BHEL is expected to generate Rs 1600 crore.
BHEL had announced a 52 per cent rise in the net profit to Rs 1,002 crore in 2004-05 from Rs 658 crore in the previous fiscal along with a 21 per cent rise in turnover.
