Govt offers diluting Coal India stake sale to half, unions to decide on offer

CIL stake sale holds the key to the govt's plan to meet its disinvestment target of Rs 40,000 cr

The tussle between the trade unions of state-owned Coal India Ltd (CIL) and the government over the proposed stake sale in the world’s largest coal miner continued on Tuesday, with Coal Minister Sriprakash Jaiswal suggesting to the union members the stake sale could be restricted to five per cent as against the originally proposed ten per cent.

“The minister offered bringing down the stake sale percentage to five per cent. We will take a call on the offer after consultations within the five unions,” S Q Zama, General Secretary of Indian National Mine Workers Federation, affiliated to the Indian National Trade Union Congress told Business Standard.

Zama is part of the six-member committee set up to talk to the government on the issue. INTUC is one of the five trade unions representing 90 per cent of the 383,000 workforce of CIL. Other unions include Bharatiya Mazdoor Sangh (BMS), Hind Mazdoor Sabha and the left-backed All India Trade Union Congress and Centre for Indian Trade Unions (CITU)..

CIL stake sale holds the key to the government’s plan to meet its disinvestment target of Rs 40,000 crore from the market in the current financial year ending March 2014. The government had initially planned to mop up around Rs 20,000 by selling ten% in CIL. Unions, however, fear losing jobs in the event of dilution.

At least two of the five unions spearheading the stir, CITU and BMS, are opposed to even a 5% stake sale in CIL. Bharatiya Janata Party (BJP)-leaning BMS is understood to have said it would align with the majority view. The unions are also demanding cancelling allocations of coal blocks made to private companies and granting infrastructure status to the coal sector.

The unions have already proposed stake purchase by other state-owned companies in Coal India and a share buyback by the company. The union members will now meet coal secretary S K Srivastava and CIL officials on 5 August to further deliberate on the issue.