Left may okay 15% stake sale in PFC, Hudco

Left parties to discuss govt's proposal for divestment in four non-navratnas today.

The government's proposal to divest 15 per cent of its stake in four non-navratna public sector undertakings is likely to get the Left's nod. This is because the CPI(M) leadership is learnt to be in favour of a pragmatic approach to reforms.

The party no longer has any problems if the government retains 76 per cent of its stakes in profit-making non-navratna PSUs, thus maintaining their "character", highly placed CPI(M) sources told Business Standard.

Simply put, the party may be amenable to the idea of disinvesting up to 24 per cent equity in PSUs wholly owned by the government.

The Left parties are divided on this issue, though. The CPI scoffs at the idea arguing that the government should raise resources through "other means" like taxing corporates at higher rates, increasing the tax base and even realising non-performing assets of banks.

"I am not bothered about 10 or 15 per cent (disinvestment). First you say 15, then raise it to 24, then to 49 and then beyond. Why do you want to divest your equity- to raise resources? There are many other ways of doing that. We are giving the alternative proposal for resource mobilisation," CPI General Secretary AB Bardhan told Business Standard.

Last Wednesday, Finance Minister P Chidambaram had met the leaders of the two Left parties to put forward his proposal for 15 per cent disinvestment in Power Finance Corporation Ltd, Neyveli Lignite Corporation, National Minerals Development Corporation (NMDC) and Housing and Urban Development Corporation Ltd (Hudco).

The four Left parties will meet tomorrow to discuss the government's proposal. The CPI, however, smells a rat in Chidambaram's proposal. The party believes that he is only trying to open the door for disinvestment first by offering "the least unpalatable" proposal like the case of the four PSUs in which the government has 90 to 100 per cent stake.

The CPI is apparently against the very idea of disinvestment, while the CPI(M)'s basic concern is about the (public sector) "character" of such undertakings. As arithmetical equations are in favour of the CPI(M), dissenting voices are likely to get isolated at tomorrow's meeting.

For the record though, the CPI(M) maintains that there is no change in its stance on disinvestment. "Where is the question of any agreement or disagreement on percentage points? We have said we are giving an alternative proposal for resource mobilisation," CPI(M) General Secretary Prakash Karat said.