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Journalism of Courage
Union disinvestment Minister Arun Shourie will make a statement on Monday on oil sector disinvestment, a decision which was ‘stayed’ for three months, a top ministry official said on Sunday.
“The minister will make a statement tomorrow”, Secretary in the Ministry of Disinvestment, Pradip Baijal, said when reporters here asked him about the issue. Baijal pointed out that there was an informal meeting last week of the Cabinet Committee on Disinvestment (ccd), where a consensus was reached. It was noted that the decision to opt for a three-month pause in disinvestment had been taken when the ccd took the proposals for the strategic sale of HPCL and BPCL on September 7. Disinvestment proceeds so far in the current financial year was around Rs 3,500 crore, he said and ruled out the possibility of meeting the Rs 12,000 crore target for 2002-03.
“If you have road-blocks and if you have a three month stay for political debate, you can’t reach that target”, said Baijal, who earlier chaired a session on disinvestment at a round-table, organised by the National Law School of India University. But he hastened to add: “in a democracy, political debates are very important. I am not at all apologetic about political debate. The debate was very healthy”.
Baijal also indicated that the government would go ahead with the controversial disinvestment of Nalco. “There is no decision to stop Nalco disinvestment”.
Speaking on the impact of the three month ‘stay’ on disinvestment, Baijal said the government had ‘lost about Rs 40,000 crore,’ as market capitalisation of listed public sector enterprises had fallen steeply. Baijal favoured quick privatisation of mtnl and bsnl.
Noting that the Steel Authority of India Limited (sail) was a classic example of a PSU losing profitability when liberalisation forced it to compete with imports and domestic private sector steel manufacturers, he said vsnl was now under tremendous competitive pressure, though it posed no fiscal threats after it had been privatised. However, he replied in the negative when asked later if mtnl and bsnl were being listed for disinvestment and said it was for the Cabinet to take a decision. On foreign direct investment, efficiency and economic growth, Baijal said China’s competitiveness had been enhanced by large-scale privatisation of state-owned enterprises and rationalisation of the labour force, which began in 1995.
“More than 30,000 companies have been privatised and about 50 million workers have been laid off since 1997 and given vrs at terms which are three to five times worse than the terms for vrs in India”, he said.
He flayed critics questioning government moves to disinvest profit-making companies, saying they are not making sufficient profits and not giving adequate returns to the tax-payers and investors. “Privatisation can yield 20 to 60 per cent times return on this investment to both tax-payers and investors”, Baijal added.
