Date:05/09/2002 URL: http://www.thehindu.com/2002/09/05/stories/2002090505920100.htm

Front Page

Govt. ready to address Fernandes concerns

By Our Special Correspondent

NEW DELHI Sept. 4. The controversy over disinvestment continues with yet another informal meeting being held today between the warring factions in the run-up to Saturday's formal meeting of the Cabinet Committee on Disinvestment (CCD). The Defence Minister, George Fernandes, is said to have held an hour-long meeting with the Disinvestment Minister, Arun Shourie, and the BJP spokesperson, Arun Jaitley.

While Mr. Fernandes projected his view about the need for ``mid-course review'' of the disinvestment process, he was told that some of his concerns would be addressed but certain policy directions could not be changed at this stage. The concerns over creation of ``private sector monopolies'', specifically through the strategic sale of the oil sector companies such as Hindustan Petroleum and Bharat Petroleum, would be addressed.

On the other hand, Mr. Shourie and Mr. Jaitley, also a former Disinvestment Minister, apparently indicated that the other issue of dropping the concept of ``strategic sale'' in public sector disinvestment was not likely to be accepted at this late stage. The principle of strategic sale, initially mooted by the Disinvestment Commission headed by G.V. Ramakrishna, was a central to privatisation.

These had also proved to be "successful", as in the case of companies, including Modern Foods and Balco.

Mr. Fernandes, however, made it clear that disinvestment was moving too fast. It was not too late to undertake a mid-course correction.

It was ``very easy' to sell public sector companies but it was perhaps time to take a "re-look" at the disinvestment process.

Mr. Fernandes is not alone and the Petroleum Minister, Ram Naik, has made it abundantly clear that privatisation of the oil sector should be slowed down. Similarly, the Communications Minister, Pramod Mahajan, has voiced concerns over the disinvestment of the Mahanagar Telephone Nigam Limited and instead suggested its merger with the Bharat Sanchar Nigam Limited. The Civil Aviation Minister, Shahnawaz Hussain, has said that Air India and Indian Airlines would be retained as public sector companies for the time being.

Mr. Jaitley, however, had enunciated the official view of the BJP on the issue just a few days ago in a note, which appears to strongly support Mr. Shourie's approach to the disinvestment process.