The Hindu : National : CITU against disinvestment of profitable PSUs

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Tuesday, Nov 23, 2004

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National

CITU against disinvestment of profitable PSUs

By Our Staff Correspondent

NEW DELHI, NOV. 22. The Centre of Indian Trade Unions (CITU) has denounced the move to dilute the Government stake in profit-making public sector units (PSUs).

In a statement here today, the CITU quoted newspaper reports that Bharat Heavy Electricals Limited (BHEL), Powergrid Corporation of India and Power Finance Corporation were on the list of companies marked for disinvestment. "The entire initiative appears to be for bridging the budgetary gaps. Selling off family assets for daily expenses and foregoing recurring flow of dividend for one time cash can in no way be considered prudent economic management, and the Government must refrain from such short-cut measures," it said.

Such "back-door" privatisation was against the spirit of the National Common Minimum Programme (NCMP).

The NCMP had ruled out the privatisation of profit-making PSUs but said the companies could access the capital market for resource generation, if required.

The statement said that CITU and the trade unions opposed such provisions in the NCMP.

However, the PSUs short-listed by the Government did not satisfy even these stipulations.

The Union Industry Ministry had said that BHEL did not require funds, warranting the sale of 16 per cent shares in the market.

But it still okayed the equity sale, though 33 per cent of the company's shares were already in private hands.

Similarly, Powergrid Corporation was cash-rich and did not need to sell shares to generate resources for internal use, given its high credibility in the market, the statement said.

The CITU also denounced the move to sell off residual Government stake in Balco to Sterlite Industries.

Instead, the Government should have penalised Sterlite for "gross violation of the shareholders agreement." It called upon the United Progressive Alliance Government to refrain from such a "retrograde" exercise and called upon the working class and the trade union movement to act to thwart such designs.

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