The Telegraph
Since 1st March, 1999
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Samata fans embers of divestment debate

New Delhi, Nov. 6: Before Prime Minister Atal Bihari Vajpayee holds his planned meeting on divestment next week, the controversy was rekindled with coalition partner Samata Party attacking the policy and the BJP rising in defence.

The Samata Party today demanded a mid-term evaluation of economic policies and privatisation. Defence minister George Fernandes, who had earlier stalled divestment in two petroleum companies, fielded party spokesman Shambu Shrivastwa to voice some uncomfortable questions for the government.

BJP spokesman Arun Jaitley, who has been a minister for disinvestment earlier, defended the policy, saying that it was dictated by market forces and neither the Samata Party nor his own could control them.

“There is no better transparency than allowing market forces to bid,” he said in reference to the auction of government stake in public sector units.

Samata’s charge: The government violated its own guidelines on divestment by allowing corporate houses, involved in litigation linked to national security, to bid. Shrivastwa cited the strategic sale of IPCL to Reliance, whose top officials have been charged with violating the Official Secrets Act. Cabinet documents, with implications for national security, were recovered from the Reliance officials, he said.

BJP’s answer: The government has already taken a view after obtaining legal advice and the party has nothing more to add. A senior BJP leader said no business house would be able to bid if such objections were raised. The Tatas have been accused of paying the Ulfa, the Hindujas are in the dock over the Bofors payoff.

“By disqualifying all top Indian business houses, you cannot divest,” he said.

Samata: Where is the profit from divestment going' It should have gone to the social sector. But the government has not given any account of how much money was allocated for the social sector. Profits from selloff “should not be used for covering the fiscal deficit caused by vulgar spending”, said Shrivastwa.

BJP: The profit is used in the social sector, like health, education and rural development. The entire collection from divestment goes to the Consolidated Fund of India.

Samata: In February, Mumbai’s Centaur hotel was sold for Rs 83 crore to Batra Hospitality which resold it within six months to the Sahara group for Rs 115 crore, earning a profit of Rs 32 crore.

BJP: The government has no control over market forces and subsequent increase or decrease of the value of a company’s stock. Sometimes a buyer has a particular interest in a particular property to bring his business activities into harmony. There was no wrongdoing in the sale of Centaur.

Vajpayee had convened a meeting on divestment on November 3, a day before he left for Cambodia, but it was cancelled without assigning any reason.

The anti-divestment lobby got a shot in the arm with Orissa chief minister Naveen Patnaik and coal and mines minister Uma Bharti opposing Nalco divestment.

Echoing Vajpayee, Jaitley said divestment issues should be discussed in the Cabinet committee set up for the purpose and within the Cabinet itself and among the allies instead of airing views in public.

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