Dithering daunts divestment panel

NEW DELHI, May 21: The disinvestment commission has accused the government of reducing its status to that of an abandoned baby'' as neith...

NEW DELHI, May 21: The disinvestment commission has accused the government of reducing its status to that of an 8220;abandoned baby8221; as neither the industry ministry nor the finance ministry have taken any action on the two reports submitted. Commission sources say that while its third report will be announced next week, the status of its earlier recommendations remained unclear.

While the industry ministry was designated as the administrative ministry to deal with the commission, it was decided that the core group of secretaries will decide on the recommendations of the commission. The core group will take a view on the suggestions and then prepare a note for the cabinet to take a final decision. But the core group has not discussed the commission8217;s reports even once.

While this has been attributed to the three-week break in the government in April, the main reason is that the government itself is not clear about the best way to process the commission8217;s recommendations. A plan being worked out by the government is that the financial part of disinvestment like GDRs, pricing, sale of shares etc will be handled by the finance ministry while the change in management and restructuring aspects of the PSU will be handled by the administrative ministry. The recommendations of these two will be submitted to the core group which will prepare the final package for the Cabinet to clear. The other alternative is that the core group will decide on all the recommendations so that one layer of decision-making is eliminated. Even the consideration of the recommendations cannot begin unless this issue is sorted out.

The finance ministry, on its part, has kept a studied silence on the commission8217;s recommendations. While Finance Minister P Chidambaram announced in his budget speech on February 28 that the first report of DC has been accepted by the government, there has been no official intimation to the DC about this and there has been little movement towards implementing or even processing the recommendations.

The commission8217;s disenchantment with the government has increased because of this. In fact the relations between industry ministry and the commission have been steadily declining with each viewing the other with suspicion.

Industry Minister Murasoli Maran is understood to be piqued by the suggestion of the commission that the funds generated by the sale of PSU shares be put under the charge of the finance ministry.

While the industry ministry feels that the commission is overstepping its brief of suggesting the sell-off percentage for PSUs, the DC is upset with the way the ministry is ignoring its suggestions and attempting to run a parallel PSU reforms process.