Govt, Left at odds over PSU divestment

The government and the Left parties are headed for their next big confrontation over disinvestment of public sector units.

"The next big fight is over disinvestment of PSUs. We have called for a special coordination committee meeting with the government to discuss this issue alone," Prakash Karat, general secretary of the Communist Party of India (Marxist), said today.

The present controversy over PSU disinvestment was triggered by the government's decision to divest 10 per cent stake in Bharat Heavy Electricals Ltd (Bhel).

The government had justified the move by deciding to lodge the funds from the blue-chip disinvestment with the National Investment Fund.

But the Left parties reacted sharply to the decision, with Karat terming it the "first major breach of the National Common Minimum Programme."

Karat said the issue of PSU disinvestment was at the top of the agenda of issues to be discussed between the Left and the government.

"We are preparing a note on the issue to be submitted to the government," Karat said.

The note will argue that the Government has acted against its stated intention of not disinvesting profit-making PSUs, as the NCMP promises.

When asked what steps the Left was likely to take if the government refused to reconsider its decision to disinvest Bhel, Karat said the matter was not "closed" yet.

CPI(M) MP Dipankar Mukherjee had written to Prime Minister Manmohan Singh recently, asking the government to reconsider its move since 23 per cent of the company were in the hands of foreign institutional investors (FIIs).

He had said in his letter that UBS Securities Asia, the FII banned by the Securities and Exchange Board of India for alleged market manipulation, was one of the companies holding a stake in Bhel.

He had warned that further disinvestment would lead to Bhel's competitors gaining a hold over the company though such firms.

Despite Cabinet approval, this is the first time the Left is persisting with its opposition to a UPA-specific issue.

How far the Left parties will go to make the government keep its part of the bargain will determine the seriousness of their opposition to the move.