Search the Internet          Tips  Sites: Finance, Investment

PM, Advani start work on resolving selloff impasse

Ajay Singh in New Delhi

Prime Minister Atal Bihari Vajpayee and Deputy Prime Minister L K Advani will act in concert to give divestment a determined nudge forward in the next few days.

A resolution of the logjam over the sell-off of oil majors Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd, well ahead of the December deadline the Cabinet had set for itself to sort out the issue, is possible, as a result.

A discussion on the implications of a failure to achieve the steep annual divestment target of Rs 16,000 crore (Rs 160 billion) in the Tenth Five-Year Plan at Monday's Cabinet meeting, convened exclusively to discuss the Plan, will be an element in the Vajpayee-Advani joint strategy to cut a swathe through the politics of divestment.

As a prelude to Monday's Cabinet meeting, in a political intervention, Advani held separate meetings with Defence Minister George Fernandes and Disinvestment Minister Arun Shourie on Saturday.

Simultaneously, Vajpayee invited Petroleum Minister Ram Naik to go with him to Lucknow over the weekend and held talks with him.

At his meeting, Fernandes reportedly sought three or four days' time to rethink his stand on divestment.

Fernandes' position has been that while he is not opposed to divestment per se, he is concerned about the way the government is going about handling public money that has gone in building public sector units.

In his August 27 letter to the prime minister, Fernandes had pointed out that a perception that assets funded through public money were being handed over to already prosperous business houses could harm the National Democratic Alliance politically.

The Cabinet decided to defer the sale of HPCL and BPCL by three months after this letter, with both Advani and Finance Minister Jaswant Singh seeing merit in Fernandes arguments.

But since then, Advani had met several British leaders who had told him about the similar political hiccups that the British divestment experience had encountered, leading him to review his position.

What is worrying Vajpayee and Advani is not just the economic implications of a failed divestment programme.

The two leaders have been deeply dismayed at the public spectacle of ministers slugging it out on divestment.

Reports from Mumbai suggested that Advani (who was in Mumbai over the weekend to attend the BJP officebearers meeting) was puzzled over Shourie's public outburst against Balasaheb Thackerays petitioning the cause of a hotelier who had been an unsuccessful bidder for a divested hotel.

Speaking to reporters at a function to inaugurate a students hostel funded by the North-East Council in the south campus of Delhi University on Saturday, Shourie had lashed out at allies and colleagues for using divestment for political shadow-boxing and said, "At this rate, nothing could be done."

"You are harming the country. The world is watching the divestment process in our country very closely. You are scaring away potential bidders. Please see the consequences of your statements because they reflect on the ability of the government to carry out its announcements," Shourie had said as a word of caution to his colleagues in the government who have been opposing the divestment process. His remarks came after his meeting with Advani.

Coal Minister Uma Bharatis gratuitous remarks about Shouries "capabilities" and "intelligence" have also upset the two leaders.

Both Vajpayee and Advani believe that outbursts of this kind can only make it harder to achieve political consensus in a government that comprises 25 political parties.

Perhaps conscious of the fact that time is running out for his government, the prime minister has taken a number of political initiatives in the past few days to address the politics of economic reform.

He held a meeting with trade unions on Friday and assured them their apprehensions of job losses on account of disinvestment would be addressed by a high-level committee.

He also convened a meeting of state chief ministers to listen to an account of their financial difficulties.

The Tenth Plan meeting is crucial for it will seek to deepen ministers political understanding of the processes of economic reform - and what awaits India if reforms slow down.

Powered by

ALSO READ:
The Divestment DevelopmentMore Money Headlines