The Telegraph
Since 1st March, 1999
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George keeps finger on selloff trigger

New Delhi, Sept. 10: Defence minister George Fernandes, reiterating his demand for a mid-term review of the disinvestment policy, said strategic sales should be made on a case-to-case basis, not linked to a sector.

“There is a practice in foreign countries to declare a company strategic not on a sectoral basis, but case by case,” the minister told reporters on the sidelines of a seminar organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) here today.

Urging the government to follow the example of other countries, Fernandes said the term strategic carries different connotations when used in special contexts. For instance, he said the word takes on a unique meaning when woven into defence and business parlance.

“Giving one company to another through a strategic sale in the economic sense would simply create a monopoly,” he said in what has come to be a common refrain in his opposition to the sale of state-owned firms.

The fresh statement assumes significance as several key ministers in the ruling NDA coalition have been pressing the government to declare oil, power and telecom strategic sectors. There is a subtle change that came through today: While Fernandes remains steadfast in his opposition to sale of Hindustan Petroleum and Bharat Petroleum because he fears a change in their ownership will spawn private monopolies, his remarks indicate he may no longer want a slew of sectors to be dubbed strategic — something his colleagues in the Cabinet would like to see.

The minister said he has never been an opponent of reforms. “I have only suggested we take a mid-term review to find if correctives are called for. Unfortunately, the difference of opinion within the government is being projected as internal war, which is not right.”

Despite the talk, Fernandes has been one of the strongest critics of the current disinvestment policy, calling for a rethink to decide why and how much of the state-run companies should be sold off to private firms.

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