‘NDA Lacks Will & Desire For Divestment’

New Delhi, April 24: | Updated: Apr 25 2002, 05:30am hrs
The report of the parliamentary standing committee on finance, which has castigated the government on various aspects of disinvestment policy, shows that that there is neither political will nor desire in the ruling coalition to sell off the public sector undertakings (PSUs). Given a choice, members of Parliament would not allow privatisation.

The fact that in the parliamentary standing committee, as is in other similar bodies, most of the members are from the ruling National Democratic Alliance (NDA), makes its recommendations curiouser. Further, there is no note of dissent, which means that there is unanimity in members’ views. This implies that NDA MPs are not convinced of the policies of their own government.

However, the committee recommendations are not much different from the rhetoric of resolutions of trade unions. Though a detailed description has been given by the ministry of disinvestment on the techniques, broad policy base and transparency of privatisation, the committee has blandly charged the government of not bringing out a “comprehensive policy on disinvestment.”

According to the committee, privatisation is still carried out on a “case-to-case basis and the procedure is also re-defined and modified from time to time.” Members of the committee apparently do not realise that privatisation has be on a case-to-case basis for the simple reason that some of the issues involved in privatisation of any PSU are unique. For instance in the privatisation of Hindustan Zinc Limited, the issues of environmental clearance and monopoly were important; in VSNL, it was the issues of tax litigation and surplus land, among others, that held the divestment. What the committee seems to be suggesting is a straitjacket, not a comprehensive policy.

The committee has also found fault with the asset valuation guidelines. It finds those as “inadequate and vague especially on the issue of land valuation of the disinvested PSU.”

This is despite the fact that all valuations have been carried out in accordance with internationally accepted standards. The committee also ignored the MoD secretary’s argument that NTC has Rs 2,400 crore worth of land in Mumbai, but this amount could not be realised because it is an encumbered asset.

The committee’s recommendations on guidelines disqualifying bidders from taking over PSUs are even more ridiculous. It finds the existing guidelines weak, inadequate and porous. But strong and adequate guidelines — by the committee’s reckoning— would just finish off the privatisation process because the government is unable to find too many buyers even for good PSUs.