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Journalism of Courage
Finance minister P Chidambarams disinvestment agenda hit its first rough patch this week with the petroleum ministry refusing the inclusion of Engineers India Ltd (EIL) in this years sell-off list.
Sources in the Department of Disinvestment (DoD) confirmed that petroleum minister S Jaipal Reddy has declined permission to a 10 per cent sale of government holding in EIL through follow-on public offerings. We received the letter this week, they said.
Reddys refusal comes within days of Chidambaram directing DoD officials to expedite divestment,especially in companies in which public holding is less than 25 per cent. The government holds 80.4 per cent in EIL.
Chidambaram was hoping to use disinvestment to signal markets of his intent to boost investor confidence and shore up government revenue for paying off subsidies. Ironically,the reason for putting off EIL disinvestment is that state-run oil marketing and refining companies do not have money to engage EIL for expanding or retrofitting their refineries as the government has not paid them their dues for selling auto and cooking fuels at a subsidy.
EIL now has fresh orders of about Rs 1,000 crore compared to nearly Rs 4,000 crore in the last fiscal,its officials said.
In case the 10 per cent disinvestment in EIL were to be insisted upon,they said the government would have managed only about Rs 750 crore.
