NEW DELHI, NOV 23: Five weeks after three of the four members, including the chairman, of the Disinvestment Commission submitted their resignations, the government will finally take a decision on whether or not to accept these. Prime Minister Atal Bihari Vajpayee has called the minister for heavy industry, Manohar Joshi, for a meeting on the matter tomorrow.On October 14, the day the government was sworn in, Disinvestment Commission chief G V Ramakrishna, and two members - economist Prof Suresh Tendulkar and former SBI chief Dipankar Basu - put in their papers to allow the government to recast the Commission. NTPC chief, Rajendra Singh, did not put in his papers as he felt the government may misunderstand his motives, and think this was an act of criticism. The current term of the Disinvestment Commission comes to an end on November 29.The government has come in for a lot of flak on disinvestment recently - former finance minister P Chidambaram as well as the Congress party attacked the government for selling GAIL shares very cheaply in the overseas GDR market - and the PM is understandably keen to avoid this. One of the key issues he will discuss with Joshi, apart from the resignations themselves, is what kind of powers will be given to the reconstituted Commission. Currently, the commission has virtually no administrative powers, or even powers to advise the government on how to conduct the disinvestment - these were stripped by the UF government in January 1998. Since the commission has constantly raised this issue with the government - it first raised it in its report in March 1998 - it seems unlikely that it will even accept a fresh term, unless its powers are upgraded.With the Disinvestment Commission already having submitted its recommendations for all the 53 public sector units referred to it, the main work for the Commission now is really to monitor the implementation of the disinvestment. It is about the process of disinvestment, in fact, that the opposition parties have hauled the government over the coals. In GAIL's case, for instance, as Chidambaram pointed out, the government virtually sold the shares at the lowest price in two years. Similarly, in the case of IPCL, which the Commission had recommended should be sold to a strategic partner, there is a raging controversy over what method should be adopted to choose the strategic partner - various officials in the government as well as some ministers are in favour of Sotheby's-style open auctions, but as this paper has pointed out on various occasions (Nov 6, Oct 20), this helps the bidder rather than the government.Another issue which needs to be addressed is that of the quality of monitoring. One of the main points which emerges from the GAIL controversy is that the Core Group, currently in charge of the process, is not able to monitor the markets efficiently, nor is it in a position to bargain intelligently with foreign merchant bankers.One of the proposals doing the rounds now, to address this issue, is to have a separate implementation authority which will be monitored by the Disinvestment Commission. The Prime Minister's Office (PMO) was first keen to be this authority, but this was then vetoed as any criticism of the process would reflect directly on the PM himself. It was then decided that this authority could be the Finance Ministry. It is expected that in tomorrow's meeting, the PM will take a decision on this as well.Equally important, in tomorrow's meeting, is what kind of powers will be given to the reconstituted Commission. Ramakrishna, for instance, has gone hoarse pointing out that the government pays scant attention to the Commission's recommendations. The Commission had recommended that 4 PSUs be closed, but only one of these has been accepted. Similarly, while the Commission has recommended that 32 PSUs be sold to strategic partners, the government has accepted this for only 8PSUs; of the 5 PSUs where just shares were to be sold, the recommendations have been accepted for only 3.
