The Telegraph
Since 1st March, 1999
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Govt dumps strategic sales

New Delhi, Aug. 16: The Centre today said it was abandoning plans to sell stakes to strategic partners in state-run companies, but suggested it would continue selling small chunks of shares of profit-making PSUs in the market.

“We will not go for strategic sales in any firm. We do not think they are transparent,” finance minister P. Chidambaram said.

Left leaders said privately they knew the minister meant market offerings would continue, though he would not touch navratnas because of their strong reservations.

Chidambaram’s junior colleague, S.S. Palanimanickam, told the Rajya Sabha the government was dropping plans to sell shares in 13 firms, including Nalco, Balmer Lawrie, HPCL, Engineers India, Shipping Corporation, National Fertilisers and Rashtriya Chemicals and Fertilisers.

The essence of the announcement, aimed at keeping the Left in good humour, had already come through in a note Chidambaram sent to key ministers and the Prime Minister. “Listing increases surveillance of regulatory agencies and makes management more responsive,” he had said.

Small stake sales in other profit-making PSUs, in a way that keeps government ownership at comfortable levels, will start in the market after the Parliament’s monsoon session. The Left is expected to continue making token protests against even these sales but is not expected to be strident on the issue as long as its main demands ' end to strategic sales and selloff in navratnas ' are fulfilled.

“Chidambaram’s announcement is welcome. We know they will not sell navratnas. However, trade unions will continue opposing public offers in other profitable PSUs as well,” CPI leader Gurudas Dasgupta said.

Chidambaram made it clear today that residual stake sales in PSUs where selloff has started would be taken up “on a case-to-case basis.”

The government is keen to sell 8-9 per cent of the 18 per cent it holds in Maruti. It also wants to launch public offers in Indian Airlines, Air-India and several successful state-run banks, including Syndicate Bank.

In another attempt to soothe Left’s feathers, Chidambaram deleted an amendment to a banking reform bill introduced in Parliament today. The bill would have allowed government stake in PSU banks to fall to 33 per cent from 51 per cent.

“In public offerings made by banks to raise capital, we will retain majority control,” finance ministry officials said. “The deletion in the bank amendment bill is a signal of things to come. We will see how they deal with banks before taking a position on the issue,” said RSP leader and left co-ordination committee member, Abani Roy.

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