Social plans may not take a hit

The government's decision to put disinvestment on hold will not adversely impact its resource mobilisation efforts to finance the social sector programmes.

"The impact will be minimal. Since only 75 per cent of the interest generated from the investments made by the corpus of the National Investment Fund were to be utilised to finance the NCMP flagship programmes, the resources generated from it would have been very small - a few hundred crore rupees," a finance ministry official said.

Even as this was the message emanating from North Block, the finance ministry received a letter from DMK supremo and Tamil Nadu Chief Minister M Karunanidhi expressing happiness over the UPA government's announcement to put on hold all disinvestment proposals.

In a letter to Finance Minister P Chidambaram thanking him for the effort taken in this regard, Karunanidhi said the workforce of the public sector in the entire country would always be grateful to the UPA government for the decision.

"The people of Tamil Nadu are extremely happy over the announcement made by Prime Minister Manmohan Singh today for keeping all disinvestment decisions and proposals on hold in quick response to the request made by all alliance partners and labour force," the letter added.

However, there is a sense of some disenchantment with the DMK's stance on disinvestment in some sections of the government.

The common refrain is that local Tamil Nadu politics had meant that the party chose to forget its past record on disinvestment and oppose the stake sale of Neyveli Lignite Corporation.

"DMK was a party to every key disinvestment decision taken during the rule of the NDA. It has also been part of every disinvestment decision taken in this government, including Bhel, PFC and NMDC. The DMK has not changed its ideological tack, but appears to have reacted to local issues in Tamil Nadu," an official added.

This is the second time that a decision pertaining to disinvestment has been put on hold (the first being Bhel) after a decision by the Cabinet.

Government officials, however, discount the decision regarding Bhel stating that in case of Bhel they took a policy decision not to divest Navratnas.

"This time the government could not have put just Neyveli on hold, so all the disinvestment proposals have been put on hold," an official said.