The Telegraph
Since 1st March, 1999
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George hangover haunts Atal

New Delhi, Aug. 30: Prime Minister Atal Bihari Vajpayee’s pro-reforms economic policy is likely to suffer a setback with the socialist streak in George Fernandes resurfacing all of a sudden.

Although he has been guarded while criticising the sell-off of public sector units (PSUs), the defence minister is expected to strongly oppose the government’s disinvestment policy when the Samata Party’s national executive meets here on Sunday.

The meeting, primarily to re-elect Fernandes as party president is likely to attack the lack of transparency in disinvestments, especially in oil companies as they involve national security. At its national council meeting on June 12 and 13 in Vijayawada, the Samata had deliberated on the economic scene but the resolutions were muted in their criticism.

Samata spokesperson Shambu Shrivastawa, however, said neither his party nor Fernandes was opposed to sell-offs. “We are only questioning the process,” he said and denied that disinvestment was on the agenda of Sunday’s meeting. “As of now, it is not on the agenda. If somebody raises it, it may be deliberated upon.”

Fernandes, who is not a member of the Cabinet committee on disinvestment, has written to Vajpayee expressing a desire to attend the panel’s September 7 meeting to discuss disinvestment in Hindustan Petroleum and Bharat Petroleum. The meeting, scheduled for August 29, was postponed to accommodate the NDA convener.

Fernandes’ opposition, especially to disinvestment in HPCL and BPCL, has added a spin to the controversy that he is playing into the hands of those opposed to a particular industrial house.

Some analysts blame the differences of opinion on the schism in the National Democratic Alliance. But there is also a view that Fernandes, feeling marginalised by deputy Prime Minister L.K. Advani and within the Samata by Nitish Kumar, wants to rake up populist issues to underscore his relevance. In June, Fernandes had floated Lok Manch, an apolitical outfit, to take up issues like disinvestment and creation of jobs.

In his letter to Vajpayee, Fernandes has asked for a review of the divestment policy to guard against the “rich getting richer” and prevent private monopolies. Asked what national security was involved in selling off oil companies, petroleum ministry sources backing Fernandes cited the 1971 war when the privatised oil sector refused to cooperate with the government.

To ensure transparency, sources said the defence minister is likely to demand that:

n valuation of disinvestment be made public before closing the deal

n the government announce the number of shares divested and the name of the company so that the public can raise objections, if any

n make public the shareholding agreement.

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