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Journalism of Courage
In a yet another jolt to the country8217;s economic reforms process, the Cabinet on Wednesday deferred a decision on a minor tinkering in the ceiling on foreign direct investment FDI in telecom, insurance and civil aviation.
But the concern over the disinvestment issue was evident in the fact that the official meeting was followed by another, informal one at the Prime Minister8217;s residence where top ministers were present.
This is the second setback to reforms after the Cabinet Committee on Disinvestment had decided, earlier this month, to defer a decision on strategic share sale in oil firms Bharat Petroleum Corporation and Hindustan Petroleum Corporation by three months.
This decision had hit the country8217;s stock markets and drew heavy flak abroad, especially in the foreign media.
Though no official reasons were given, sources said the FDI deferment was to allow the concerned ministries time to consult each other before bringing it back to the Cabinet. The absence of Civil Aviation minister Shahnawaz Hussain was also touted as being a reason for the deferment.
8216;8216;The inter-ministerial consultation was not complete. The Cabinet did not have the comments of the concerned ministries8217;8217;, said sources. The note had been prepared by the Commerce Ministry.
A member of the Cabinet said that the issue had been listed with the objective of discussion among the ministers as the proposal had been 8216;8216;abruptly8217;8217; prepared.
Earlier this month, a steering committee headed by planning commission member NK Singh had recommended broadening investment norms, raising the FDI cap in insurance and civil aviation to 49 percent from 26 percent, and in mobile and basic telephony to 74 percent.
A Cabinet decision to cut down flab in the Oil and Natural Gas Corporation and Bharat Petroleum Corporation Limited also got brushed under the carpet on grounds that the proposal for VRS would be reviewed.
Sources said that since the two are navratna companies, a better package would be redrafted. Instead of 45 days wage cover for each year of service, the new proposal would be improved to reflect the recommendations of the Second National Commmission on Labour which has advocated a 60 days cover for layoffs in profit manking organisations.
It was obvious from the way Prime Minister Vajpayee went into a huddle with his senior Cabinet colleagues after today8217;s Cabinet meeting that his weeklong absence from the country has not helped to cap the disinvestment controversy raging in the Government.
Attended by some of the main players in the disinvestment debate including LK Advani, Jaswant Singh, Ram Naik, Arun Shourie and Pramod Mahajan, the meeting is believed to have been called to review the developments in the aftermath of the stormy CCD meeting which postponed the proposed privatisation of oil companies.
The Government is believed to be worried at the fissures that have appeared in the Cabinet over this issue. The anxiety is not only about the future of the economic reforms programme but also about the personal twist the controversy has taken.
Both Vajpayee and Advani would like to ensure that there are no further ruptures and this evening8217;s impromptu meeting was the first step of a damage-control exercise. The aim over the next few weeks would be to hammer out a consensus on the route to economic reforms so that the Government stops speaking in different voices.
