Back to Square One?

Finally the verdict is out. The Supreme Court has directed the government on the basis of two petitions filed by the Centre for Public Inter...

Finally the verdict is out. The Supreme Court has directed the government on the basis of two petitions filed by the Centre for Public Interest Litigation and Oil Sector Officers Association, to stop the disinvestment process of the two oil public sector undertakings, HPCL and BPCL, and get the 8220;appropriate approval8221; from Parliament.

Irrespective of what the BJP says, the Supreme Court8217;s verdict on HPCL and BPCL is bound to have a far-reaching impact on not only the Centre8217;s disinvestment process but also on PSUs at the state level. The verdict, which requires the government to get a parliamentary nod for the disinvestment of HPCL and BPCL instead of cabinet approval the two PSUs were created through a Parliamentary legislation in 1974, could well change the course and pace of the entire disinvestment process.

While the petitioners in the HPCL-BPCL case would argue that the appeal was not against disinvestment per se, there is no denying that this decision could be just the excuse the naysayers were looking for. There are several factors that lead to this conclusion.

The entire disinvestment process has always been fraught with controversies with any move made by the disinvestment ministry facing resistance from not only the administrative ministries of the PSU, but also allies of the government and the Opposition parties.

There are, besides, vested interests which come into play the moment such a move is made. Despite these factors, however, the fact is that under the astute guidance of Disinvestment Minister Arun Shourie, the Centre was able to go in for some big ticket privatisation, such as that of Balco, VSNL and Maruti Udyog Ltd. But having to now go to Parliament to disinvest PSUs created by an Act of Parliament would be a serious hurdle. The ministry would think twice before initiating the disinvestment of any PSU.

Like HPCL and BPCL, there are other PSUs not just at the central but state level which were created through legislative Acts. Who, then, are the real owners of such PSUs? It cannot be the legislature.

Any Act that is cleared at the central or state level is only an enabling provision which brings the PSU concerned into being. Therefore, with the executive being the real owner, matters should be left to the government in power to take decisions pertaining to any PSU. After all, it is the cabinet alone which can overturn a cabinet decision.