Search the Internet          Tips  Sites: Finance, Investment

Panel blasts govt on divestment policy

A parliamentary panel on Tuesday severely criticised the government for not formulating a comprehensive policy on divestment and asked it to dispel all doubts relating to transparency, maturity and finesse of procedure for sale of equity in PSUs.

"The policy of the government in regard to divestments lacked consistency," the standing committee on finance said in its report on demands for grants (2000-01) of the Department of Divestment, presented to Parliament on Tuesday.

The committee, chaired by Shivraj Patil, said that the government had only obtained approval of Cabinet in specific cases on different occasions.

"There is a need to have an informed discussion on the subject in order to enable the government to take a holistic view," it said.

Asking particularly for a review of the 'strategic sale' route adopted for selling government equity, it said "widest possible consultations must be held with the workers at an appropriate stage, invariably with a view to fully safeguard their interests in all the cases of divestment".

On the level of transparency in the divestment process, the divestment secretary told the committee: "We have far too little experience to say that we have a fool-proof process. The divestment minister had answered in Parliament that we are in the process of preparing a 'Divestment Manual' on the basis of experience so far."

The committee said it does not agree with the government's contention that the divestment commission is likely to be reconstituted very soon.

"In the circumstances, the committee was at a loss to understand why substantial amounts should be allocated for the commission year after year when its reconstitution is not very imminent, just to remain underutilised at the end of the year," it said.

It recommended that the scarce resources should be utilised more prudently for some important development projects of the government.

Asking for curtailing of domestic and foreign travel allocations of the department of divestment, it said during 2000-01, out of the total outlay of Rs 31.1 million, Rs 10 million was allocated for domestic and foreign travel.

Similarly, during 2001-02, out of a total outlay of Rs 31.7 million, Rs 8 million or about 25 per cent has been provided under these heads.

"Such huge amounts should not be needed just for travelling allowances of officers on transfer for attending various meetings within and outside the country, and for training purposes," the committee said.

It said the budget estimates of the department of divestment were being prepared in a totally unrealistic manner.

"There was a tendency in the department to make higher budgetary estimates, year after year and reducing these at the revised estimates stage and ultimately ending up by spending only a small amount," the committee said.

Tell us what you think of this report