Reforms: Govt cuts a sorry picture

‘‘Minority sale of equity in IOC, ONGC and GAIL has been deferred to take an integrated view on the oil sector,’’ Disinvestment Minister Arun Shourie told reporters after the Cabinet Committee on Disinvestment meeting.

He said that the next steps, which were to be outlined after an approval on HPCL and BPCL, would get delayed because of today’s decision. The proposed calender for disinvestment of 15-20 firms had been put aside because of today’s decision, he said. As a result, he said, it could be difficult to meet the Rs 12,000-crore target for the current fiscal year from disinvestment proceeds.

However, he said he was hopeful that the disinvestment of Shipping Corporation, NALCO, National Fertilisers and a public offer of Maruti Udyog Limited would continue as scheduled.

Barely days ago in Mumbai, Shourie had said that the HPCL and BPCL sale would be a test case for reforms. However, beginning with Petroleum Minister Ram Naik himself, then Defence Minister George Fernandes calling for a mid-course review and then the RSS yesterday, it was clear that Shourie was getting increasingly isolated.

Reminded of his Mumbai speech, he quoted an Urdu couplet the gist of which was: ‘‘the night is over and so is the issue.’’

Asked how the deferment would affect the Government’s overall disinvestment plan, Shourie played it safe: ‘‘Let’s see what happens in coming weeks and months, how the market, rating agencies and advisors view it.’’ Wasn’t this a wrong signal? He replied: ‘‘Please explain it to the others.’’

If the Government didn’t explain its decision, it had little reason to do so. For, it was clear right through the day that Shourie was virtually isolated. First, at a morning meeting called at the PM’s house, ostensibly to test the waters and then later at an unusual meeting of the Cabinet Committee on Disinvestment.

For the first time ever, the CCD was expanded to ‘‘invite’’ HRD Minister Murli Manohar Joshi, Telecom Minister Pramod Mahajan, Coal Minister Uma Bharati, Urban Development Minister Ananth Kumar, Defence Minister George Fernandes and Minister for Civil Aviation Shahnawaz Hussain. Only Joshi and Fernandes attended.

But the meeting was little more than a formality, the decision being taken early on that buying time was the best way for the Government to find a way out of what had become a political minefield.

Shourie had some reason to celebrate, though. The CCD approved that public sector undertakings (PSUs) and cooperatives in which government’s shareholding was 51 per cent or more would be barred, in principle, from bidding for other PSUs. But it added a rider: in special cases, the relevant ministry could take permission from the Cabinet.

And in a snub to the RSS and Naik, the Government rejected the demand that the oil sector be treated as a strategic sector. Instead, it decided to continue with the government’s nomenclature as enunciated by former Finance Minister Yashwant Sinha in his budget speech.

Earlier at the morning meeting, both Shourie and Naik gave presentations: while Shourie stuck to the economic rationale for speeding the selloff—and completing the process by the middle of next year—Naik played upon the country’s ‘‘security concerns’’ to thwart the process. Feranandes reiterated a review with special emphasis on the sell-off options.

When both sides refused to budge, Advani spelt out his verdict buying time to evolve a consensus. He said that a review should be done to synchronise the different views and arrive at a consensus within three months.

Advani and Finance Minister Jaswant Singh also expressed their reservations to Shourie on his public statements on the issue. This was an apparent reference to his Mumbai speech where he complained of an ‘‘ambush’’ by ministers.