The Congress Party has seriously mishandled the disinvestment of BHEL in two respects. The party knew very well that disinvestment is a sens...
3 min read
Whatsapp
Twitter
Facebook
Reddit
The Congress Party has seriously mishandled the disinvestment of BHEL in two respects. The party knew very well that disinvestment is a sensitive issue for the Left parties. The arguments for reform are in themselves strong. And it could also be argued that disinvestment is not incompatible with the National Common Minimum Programme. Even so, it was incumbent upon the Congress to fully consult its allies before forcing the issue in public. It has created a situation where either the Congress or its allies will have to lose face in public. This does not augur well for coalition politics.
But there is a deeper sense in which Congress has bungled the politics of the issue at stake. The government has not forcefully and publicly explained its reasons for disinvestment in BHEL. What is its case for disinvesting in BHEL specifically? The general arguments being cited are simply not powerful enough. Will the government use the resources raised to make its financial position look good? If the argument is that disinvestment will help generate resources for the social sector, then more needs to be said. Why should this money come from BHEL, rather than a consolidation of government finances? What are the reasons specific to BHEL that warrant its disinvestment?
You’ve Read Your Free Stories For Now
Sign up and keep reading more stories that matter to you.
Many reasons can be offered. BHEL is a cash-rich company with reserves of Rs 5,000 crore. But contrary to what the Left argues, this is not a sign of the company8217;s success but its weakness. After all, it suggests that the company has not been able to put the cash it generates into productive use. There is also some irony in the fact that much of BHEL8217;s non-government shares are already held by foreign institutional investors. Disinvestment might allow its riches to be shared by Indian equity holders. In fact, the EPFO, the Left8217;s holy cow, desperately needs good equities in which to invest. And, finally, can a company like BHEL remain a public sector company, and effectively face the challenges of the emerging market in India? These issues need to be debated thoroughly. But the Congress has instead stuck to general platitudes about disinvestment rather than sell the case for disinvestment in BHEL convincingly.
