The Telegraph
Since 1st March, 1999
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Industry sees early selloff solution

New Delhi, Oct. 3: Industry is hoping the brouhaha over the government’s disinvestment programme will blow over soon with the reform-minded elements within the BJP-led Cabinet able to break the political gridlock that has stalled the process.

On Wednesday, Prime Minister Atal Bihari Vajpayee made a robust defence of his government’s policy with a strong commitment to pursue reforms, while admonishing his squabbling ministers for bringing the fight into the open.

Vajpayee’s attempt to reassert his pre-eminent position within the government came amid a rising groundswell of criticism from the Swadeshi elements within the Sangh Parivar, which has been increasingly disenchanted with the course that the second phase of reforms has been taking.

The biggest beef has been over the attempts to divest the government’s lucrative investment in the state-run oil companies — Hindustan Petroleum Corporation and Bharat Petroleum Corporation — to a strategic investor.

“The whole issue with regard to the sensitive areas of disinvestment is now being considered by the Prime Minister himself,” said Ficci secretary general Amit Mitra.

“We expect that there will soon be a resolution. However, while the political process comes to its conclusion, Ficci urges the government to simultaneously continue the disinvestment for 12 of the 30 companies that were cleared by the Cabinet.

The process must be immediately taken forward in areas where there is a broad consensus in the country, while the nation awaits the Prime Ministerial decision on more strategic and sensitive areas of disinvestment.”

Defence minister George Fernandes, petroleum minister Ram Naik and human resources minister Murli Manohar Joshi have set their face against attempts to sell the oil companies to private players, and have been urging the government to ensure that the oil sector is reclassified as a strategic sector — along with defence and atomic energy — where the government should have a role to play.

T.K. Bhaumik, CII’s senior advisor on policy, said: “The disinvestment process has run into unprecedented roadblocks. But the momentum should be maintained as FDI inflows depend on the process. The pace of disinvestment was just gaining steam when it ran into a wall. When to restart the process will be politically decided, but small disinvestments can continue.”

“It harms the market sentiment, especially in exports and investment, if these market policies are stopped by political power. It should be resolved immediately,” he added.

Sudershan Banerjee, CEO of Hutch, said: “ I am not a pessimist. India is a complex country which has moved from a socialist mindset to a more open economy.”

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