The Ministry of Mines has turned down a request from the Finance Ministry on further dilution of government equity in the National Aluminium Company Limited (Nalco), causing differences to crop up in the government.
Mines Minister B K Handique said that his ministry is not in favour of any further equity dilution in the navratna PSU.
"We are not in favour of any further divestment in Nalco. It does not need require any funds. It is doing good," Handique told PTI. He said that the aluminium producing company would not be in need of funds for the next two years.
"The Nalco board had earlier expressed views against disinvestment. But, on the request of the Ministry of Finance (Department of Disinvestment), we had asked the board to consider the matter again," he added.
The Department of Disinvestment, which comes under the Ministry of Finance, had asked the Mines Ministry to consider 10 per cent disinvestment in Nalco, a proposal that was forwarded to the firm's board for further deliberation.
"The Ministry of Finance had made a reference to the Ministry of Mines in March 2010 to consider disinvestment of 10 per cent equity, out of the remaining 87.15 per cent of the total paid-up capital held by the government in Nalco," Handique had earlier said in Parliament.
His statement comes days after Orissa Chief Minister Naveen Patnaik said that his party, the Biju Janata Dal, would oppose any move by the Central Government to disinvest Nalco.
Many non-Congress political parties and trade unions are also opposed to the move. State BJP president Jual Oram had even threatened to "hit the streets" if the Centre took any such step.
The state-owned company reported a five-fold jump in its net profit to Rs 391.48 crore for the fourth quarter ended March 31, 2010, as against the year-ago period. The company has cash reserves of about Rs 4,300 crore.
As per the disinvestment plans, the Union Government intends to to garner as much as Rs 40,000 crore this fiscal by selling some of its equity in PSUs such as SAIL, Coal India, Engineers India and Hindustan Copper.
