Ministry ignores DPE advice on IA share sale

The Aviation Ministry promptly claimed to the DPE that they had got an exemption from the Union Finance Ministry on basing the disinvestment exercise on the Kelkar committee report. Last Friday, the DPE in a departmental order (DO) raised several fresh queries and asked the Aviation Ministry toclarify if the guidelines had been changed for all cases. The DPE also wanted to know how the Finance Ministry had issued an exemption in the case of IA disinvestment.

While the Aviation Ministry is yet to reply to the fresh queries raised by the DPE sources maintain that the DPE’s objections will not come in the way of the cabinet note on IA disinvestment. Says a senior Ministry official: “what the DPE doesn’t know is that the disinvestment commission may not even have accepted the IA case. The Kelkar committee is a ready blueprint which is available to us. This is a typical case of bureaucratic objections just to delay a decision”.

However, the DPE is not buying this argument. The DPE’s DO to the Aviation Ministry has made pointed queries on whether the Aviation Ministry has even bothered to consult the Disinvestment Commission on whether it was prepared to take on the IA case. In its reply to the DPE the Aviation Ministry was silent on this point.

The Kelkar commission recommendations on which thecabinet note is based had recommended a disinvestment of 51 per cent of the government stake in IA with 40.4 per cent being off-loaded the public and the remaining 10.6 per cent to the airline employees. The government has already acted on the Kelkar committee’s recommendation on tied equity infusion – for the purchase of 50 seater aircraft – in IA despite, objections from the President, K R Narayanan.