The following is the text of the letter dated August 27, 2002, written by defence minister George Fernandes to Prime Minister Atal Bihari Vajpayee on the disinvestment of public sector companies
Dear Atalji,
I had written to you several weeks ago expressing my concerns on the Disinvestment Policy adopted by our government.
I believe that before any further disinvestments take place, we in the government should decide as to whether the route adopted by us is benefiting the citizens and the consumers in our country or not. I believe the objective for disinvestments should be to benefit the public, the consumer and the investor, and at the same time, to improve competitiveness and eliminate monopoly.
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Moreover, the decisions we need to take are not only economic but more importantly political. Most people do not realise that the government is only a proxy shareholder in the PSUs and it is the money of the people of India that has created these businesses.
Our Disinvestment Policy should therefore, be to offer these companies to the public of India. The current system of strategic sales is tantamount to handing over the entities created with the wealth of the people of India to further enrich the already rich.
I understand that virtually the entire privatisation in the UK was to the public at large i.e. the Airlines, the Steel Industry, the Telecom Industry, the Automobile Industry, the Gas & Petroleum Sector etc. were privatised by offerings through the stock markets.
Likewise I believe the privatisation of the same sectors in France including the Banking and Oil sectors were disinvested to the French public and not through strategic sales. Malaysia, China, South Africa, Spain and Germany have also followed suit.
In the transfer of VSNL and IPCL we have created monopolies with Tata and Reliance. Cases of the richer becoming the richest with people