Disinvestment still on, says FM

A day after the Centre formally called off strategic sale of stakes in 13 profit-making PSUs, Finance Minister P Chidambaram today said disinvestment had not been put on the back-burner and indicated that it would be taken up after discussions with the Left parties.

"Disinvestment is not in the back-burner," Chidambaram said on the sidelines of a conference of National Consumer Dispute Redressal Commission here.

On delay in deciding about divesting 10 per cent government stake in Bhel through public offer route, he said: "We have not taken any fresh decision. We are holding discussions with Left parties."

The minister sought to clear the haze over privatisation policy by indicating that the government was open to the public offer route to offload minority stakes in PSUs but was against strategic sale of stakes, which would transfer management control to private hands.

"The decision on (not opting for) strategic sale of profit-making PSUs was taken long ago," he said. Just after the UPA assumed office last year, the government had made it amply clear that the national common minimum programme was against the process of disinvestment through strategic sale of stakes in PSUs, a route that was actively taken up by the previous NDA regime.

"The route of strategic sale is not the proper approach," Chidambaram said, adding that he was ready to argue on this with the opposition party leaders notably former finance minister Yashwant Sinha who had challenged the UPA's decision.

Chidambaram also stated on Tuesday that the Centre would consider residual stake sale on a case-to-case basis as it has to fulfil sale and purchase agreements and legal obligations contained in the agreements.

The ongoing controversy over disinvestment flared up after Minister of State for Finance SS Palanimanickam, in a written reply in the Rajya Sabha on Tuesday, announced that "In keeping with the NCMP guidelines it has been decided to call off the process of disinvestment through strategic sale of 13 profit-making PSUs."

Chidambaram also validated this argument saying strategic sale of stake in PSUs was not the right option, as it was not a "transparent method" and had raised questions. The minister also indicated the government would not have any problems in funding the ambitious job scheme that promises 100 days employment to all rural families, which would be rolled out soon after Parliament passes the Bill.

Finance Minister P Chidambaram said the government would meet the requirement for national rural employment guarantee scheme by "normal increase" in budgetary support, savings from existing employment schemes and additional allocation in gross budgetary support to states.

"The current year's budget provisions is enough for the scheme. Next year, we would have to rework the requirement. We should be able to roll out the scheme," he said.

Though some states are apprehensive in finding funds for the scheme, Chidambaram said: "The states share in the funding is only 10 per cent. It is their duty to provide the funds. If not provided, they will face public criticism."

In his Budget for 2005-06, Chidambaram had stated that the national food for work programme would be converted into the National Rural Employment Guarantee Scheme with an allocation of Rs11,000 crore. The job scheme would would come into effect once the national rural employment guarantee bill is passed.

The UPA yesterday had a meeting with Left parties on the proposed Bill, which is likely to be taken up in Parliament shortly with some changes. The Bill was introduced last year but referred to a standing committee of Parliament.

The amended Bill, which was cleared by the Cabinet last week, seeks to provide 100 days employment to each rural household, instead of the earlier provision of providing jobs to people below poverty line in rural areas.