No decision at CoS meet on privatisation

No decision at CoS meet on privatisation
ENS ECONOMIC BUREAU

JULY 8: Refusing to divulge details of the meeting, Pradeep Baijal, Secretary, Department of Disinvestment said the tenure of the meeting was ``general'' in nature. ``The meeting was very general. But by Monday or Tuesday (that is by 10th or 11th July formal orders on global advisors would be passed. So it would not be proper on my part to reveal details of the discussions right now,'' Baijal said when contacted by The Indian Express.

However, senior officials privy to the meeting say that discussions with regard to Air India and ITDC revolved around appointment of global advisers for disinvestment in these PSUs. In the case of key PSUs like VSNL, MTNL and IBP, the CoS was unable to take any decision on disinvestment. ``Several possibilities and strategies were discussed which were general in nature,'' a senior official said.

Moreover, any decision on disinvestment in public sector units like VSNL, MTNL, IBP will be a tough one considering opposition from political heavyweights like Petroleum Minister Ram Naik, Heavy Industries Minister Manohar Joshi and Communications Minister Ram Vilas Paswan. In the case of IBP, Naik has clearly stated that he is totally against divestment in any of the oil PSUs including IBP.

While in the case of Air India where the government holds 100 per cent stake, it plans to disinvest up to 60 per cent. In ITDC, where government holding is to the tune of 89.97 per cent, disinvestment with management contract is slated for Ashoka New Delhi and Bangalore and 100 per cent sale in other hotels. In IBP the government currently holds 59.59 per cent.

With every meeting on disinvestment ending in a limbo, it remains to be seen how the government fulfills its ambitious target of disinvesting in 33 public sector undertakings by this fiscal.

``The government should have 51 per cent holding in all public sector oil companies as they are of strategic importance to the country similar to that of defence,'' Naik said at a press conference in New Delhi last week.

``The Cabinet has to take a view on my request to accord strategic status to the oil sector. A decision on this is likely to be taken in the next meeting of the Cabinet,'' he said.

Naik's view is that in 1971, the oil companies, then primarily controlled by foreigners such as Caltex and Esso, had not co-operated with the government. What he ignored, however, was the counter-argument that even if the government controlled the marketing companies, in times of war this is of little use if countries like the US decide to turn the screws on India. For, with the major part of Indian crude coming from imports, if countries like the US are really hellbent on hitting India (as Naik is arguing), all they need to do is to get the OPEC countries to boycott India.

But hadn't the Cabinet Committee on Disinvestment (CCD) agreed to sell the majority government stake in IBP on the 23rd, reporters asked Naik. Naik then exposed the facade of the `in principle' clearance by the CCD for selling off 11 PSUs. ``CCD has given only an in-principle approval. There are many more procedures and clearances required before taking a final decision.''