The Hindu : Opposition, allies protest divestment

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Thursday, Feb 20, 2003

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Opposition, allies protest divestment

By Our Special Correspondent

NEW DELHI FEB. 19. The Government was put to great embarrassment in the Lok Sabha today during question hour, when its allies — the Samata Party, the JD(U) and the Shiv Sena — joined hands with the Opposition to oppose its disinvestment policy.

When the issue came up, and the Disinvestment Minister, Arun Shourie, faced the onslaught with no help from any of his party colleagues. He faced a virulent Opposition attack in the Rajya Sabha too on disinvestment of the two public sector oil companies, BPCL and HPCL, while replying to a short-duration discussion.

An unconvinced Opposition demanded that the Attorney-General be summoned to the House and explain his opinion that Parliamentary approval was not required to disinvest the two companies which were taken over by the Government by an Act of Parliament. They demanded that his report be tabled in the House.

Mr Shourie, who was frequently interrupted during his reply by the Left parties and the Samajwadi Party, ruled out privatisation of Indian Oil, ONGC and GAIL and assured them that all security concerns would be taken care of. In the mid-term review it was said that a disinvestment fund would be set up and he looked forward to the Budget for announcement of such a fund.

Assuring that about 80 per cent of retail trade of oil would remain with the Government even after the privatisation of HPCL and BPCL, Mr. Shourie said all necessary provisions were being incorporated in the shareholders agreement of the two PSUs.

The Minister came in for sharp attack when he said that at a recent meeting with the INTUC president and other unions they were shown the share purchase agreements of the two companies, to demonstrate that their interests were being protected.

Jibon Roy (CPI-M) said this was not correct. The unions had served notice for going on strike. Sanjay Nirupam (Shiv Sena) said it was not correct to say that all unions had agreed. Deepankar Ghosh (CPI) said all unions had felt that the two PSUs should not be disinvested.

"Crony capitalism"

Amid heated exchanges, the Leader of the Opposition in the Rajya Sabha, Manmohan Singh, said the Government's decision not to privatise other oil majors would only give credence to the suspicion that disinvestment of BPCL and HPCL would lead to "crony capitalism" as unscrupulous politicians and businesses would browbeat the management.

Mr. Shourie said that powers the would vest with the Government after privatisation would be specific only to national security as in the case of VSNL.Besides, whatever equity held by the Government would be vested with an assets management company so that there was no interference in the day-to-day functioning of these companies.

On oil supplies to defence establishments, Mr. Shourie said a major portion of the supplies was being provided by IOC and the question of defence supplies being affected with the sale of BPCL and HPCL did not arise.The issue generated considerable heat in the Lok Sabha, with the Opposition and some of the BJP's allies alleging that even profit-making PSUs were being sold for a song.

Mr. Shourie was repeatedly interrupted. At one stage, MPs from the RJD, the SP and the Samata Party had to be restrained from entering the well of the House. Shivraj Patil (Cong.) asked the Government to explain how the sales helped boost the economy when most of them were being sold to a private monopoly. While Mr. Patil was circumspect, other members charged the Government with disinvesting the PSUs under pressure from big business houses and multinationals.

Raghunath Jha (Samata Party) alleged that the Government was acting at the behest of Reliance Industries while Mr. Kharge of the Shiv Sena questioned the wisdom of selling profit-making units.

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