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Divestment still on, Congress for case-by-case support
Though Disinvestment Minister was in deep despair after the Supreme Court ruling in the HPCL and BPCL case, not all is lost on the disinvestment front. The HPCL and BPCL disinvestment cases have to be approved by Parliament because they were created by Acts of Parliament. Many PSUs have not been created in this manner. Disinvestment in these companies, therefore, poses no political problems.
Though Disinvestment Minister was in deep despair after the Supreme Court ruling in the HPCL and BPCL case, not all is lost on the disinvestment front.
The HPCL and BPCL disinvestment cases have to be approved by Parliament because they were created by Acts of Parliament. Many PSUs have not been created in this manner. Disinvestment in these companies, therefore, poses no political problems.
Moreover, the Acts through which HPCL and BPCL were created did not have provisions for the sale of equity to private players, as the Supreme Court observed. This problem will not necessarily obstruct disinvestment in all PSUs created through parliamentary legislation.
The Congress, which has a crucial role in passing any legislation in the Rajya Sabha, where the opposition and the NDA are evenly balanced, was quick to point out that Shourie’s pessimism was misplaced. Former Finance Minister and CWC member Pranab Mukherjee reiterated his party’s commitment to economic reforms and disagreed with Shourie’s view that the apex court's verdict was a “blow” to the disinvestment process.
“In the case of HPCL and BPCL, the government had assumed powers it did not possess. How else can it explain its decision to ignore Parliament in the case of the oil sector while moving a bill for disinvestment in 20 nationalised banks?” he asked. The bill the Congress leader was referring to is currently before the parliamentary Standing Committee on Finance.
Speaking to the Hindustan Times, Mukherjee and party colleague Abhishek Singhvi, a senior Supreme Court lawyer, made it clear that the Congress would not engage in political one-upmanship on disinvestment cases brought before Parliament.
“Since we are against disinvestment in the strategic and profit-making oil sector, we will oppose any legislation to shed equity in BPCL and HPCL. But ours will be a case-by-case approach with regard to non-strategic PSUs,” Singhvi said.
From Mukherjee and Singhvi’s views, it was evident that the Congress would expect the NDA to agree to certain modalities for the disinvestment programme as a precondition for its support. The party has repeatedly attacked the NDA for selling profit-making PSUs through a less-than-transparent process and using the proceeds to bridge the fiscal deficit.
“We don’t want the proceeds to go into the black hole of the consolidated fund of India. We want the funds used for infrastructure development,” Singhvi said.
Another issue which has often angered the Congress and the Left is the process through which companies are shortlisted for disinvestment. “We are for evaluation-based privatisation,” Singhvi said. Mukherjee added that the process could be self-defeating if the value of assets wasn’t realised.
