Don’t miss the latest developments in business and finance.

Seeing disinvestment through

Image
Subir Gokarn New Delhi
Last Updated : Jan 28 2013 | 2:26 AM IST
 The recent Supreme Court ruling on disinvestment of the two oil companies, BPCL and HPCL, is being seen by many observers as another nail in the coffin of the strategy.

 The process over the last eleven years has been anything but smooth. But, even in the face of all the resistance and controversy, it had gained momentum during the last three years. Several relatively small enterprises had been sold including some major ones as well.

 A few months ago, the public offering of the shares of Maruti Udyog Ltd. generated very quick and significant returns to small investors, a significant event in the bull run currently under way in the stock market.

 Just when the path seemed to have been finally cleared, a legal ruling has not only raised a rather imposing barrier, but also given new energy to an anti-disinvestment feeling that has always been simmering.

 The court ruling simply says that since the oil companies were acquired by the government through an act of Parliament, their disposal is also subject to the same process.

 It has to be viewed in the broader context of the division of responsibilities between the executive and legislative branches of government and the accountability of the former to the latter.

 However, in the specific context of disinvestment, what the ruling effectively does is to ask the government to seek a widespread political consensus on an issue on which it has never existed.

 It brings into focus the way in which governments have been going about the process all these years

Also Read

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

First Published: Oct 13 2003 | 12:00 AM IST

Next Story