The government was banking on a 10% stake sale in Coal India Ltd to meet its disinvestment target for the current fiscal. Given its recent decision to halve the issue size, the government is likely to miss the sell-off target.
Like in 2010, disinvestment in CIL is marred by a series of controversies this year. After many rounds of discussions and heated arguments between the coal ministry and the trade unions representing 3.57 lakh workers, the government has decided to move ahead with a 5% stake sale in the Kolkata-based Navratna company.
The disinvestment department on August 8 issued the request for proposal to sell the 5% stake in CIL through the auction route. Though the Cabinet is yet to give its approval for proposed stake sale, the disinvestment department is proceeding with the appointment of merchant bankers for the issue that is expected to garner over R8,400 crore for the government.
In a bid to win the support of protesting workers, the government plans to allot shares to CIL employees at a discount of 5% to the lowest cut-off price, up to a maximum of 10% of the offer-for-sale (OFS) size.
But facing strong opposition from employees unions who threaten to strike work, the government is reluctant even to give a time-line for the stake sale. The government currently holds 90% stake in CIL.
Opposed to any stakes sale in the company without taking the trade unions on board, Ramendra Kumar, secretary of the Indian Mine Workers Federation (IMWF), told FE, “We are opposed to even 5% disinvestment in CIL. CITU has given the notice for a three-day strike. We are also discussing that. We are also inviting INTUC to join us.” IMWF is affiliated to the leftist All-India Trade Union Congress.
The five central trade unions operating in Coal India and its subsidiaries are Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC), Bharatiya Mazdoor Sangh (BMS), Hind Mazdoor Sabha (HMS) and Centre of Indian Trade Unions (CITU).
A strike at CIL at this juncture will not just lower the domestic output but also push up imports. A one-day strike could lower