The Supreme Court’s direction to put on hold plans to offload the government’s residual 29 per cent share in Hindustan Zinc Ltd., an erstwhile public sector company and a subsidiary of Vedanta since 2003, could have ramifications for the BJP-led NDA Government’s disinvestment plans. The direction, top officials reckon, could apply to sales of the government’s shares in every public sector company that was created through nationalisation under Parliamentary legislation. “If I have understood the Supreme Court judgement, it is saying that I have to go back to Parliament for approval if the original acquisition was under a Parliamentary legislation,” NITI Aayog Member Bibek Debroy told The Hindu in an exclusive interview.
Hearing the case in a PIL by the National Confederation of Officers’ Associations of Central Public Sector Undertakings, the court said, “What is the compulsion for you to disinvest? You can’t do this without amending the law as the company was formed as an Act of Parliament,” even as Attorney-General Mukul Rohatgi submitted that parliamentary sanction was not required.
He also said he does not expect to see the government move on strategic sales in a hurry. “I am inclined to think that if there is going to be a succession of reports, anything on strategic sales will not figure on the first report as it is the most difficult thing to do.” NITI Aayog is set to submit this month two sets of recommendations: First on disinvestment of loss-making public sector companies and then on possible candidates for strategic sales — both of which, Mr. Debroy said, he had not seen.
Explaining the challenge that strategic sales — involving effective transfer of control and management from the government to a private entity— pose, Mr. Debroy said, “majority stakes cannot always be sold through global tenders… if there are three guys [bidders in the fray for a strategic sale]… I don’t see how I can make this completely transparent in the sense of being completely objective”.
Responding to another question, Mr. Debroy said that there is no chance for the Constitution Amendment Bill necessary for the roll out of the Goods & Service Tax (GST) to clear Parliament before 2018. This is the first time a Government functionary has said that the GST cannot be a reality for at least the next two years. “I think it will happen when the Rajya Sabha numbers [membership] change…the main stumbling block is the Congress… This is going to happen in 2018 or something,” he said.
The Lok Sabha has already passed the bill but the Rajya Sabha, in which the government does not have a majority, has not. Since the constitutional amendment needs to be passed with a two-thirds majority, the government cannot pass it without Congress support. According to Mr. Debroy, the composition of the Upper House could change by 2018.
