Left accuses Govt of allowing private sector to acquire PSUs

Calling attention of the government on its fresh disinvestment policy in the Rajya Sabha, Tapan Kumar Sen (CPI-M) said the shift in the sell-off strategy is a "plan to pave the way for creeping privatisation".

He said the policy is creating an enabling situation to "final privatisation of the public sector undertakings". He sought to dismiss the government argument that the 10 per cent disinvestment to give the public partnership in the PSUs, stating only a miniscule part of their capital is owned by the public.

Citing examples of ONGC, SAIL and BHEL, Sen said bulk of the shares offloaded in the market have been cornered by foreign institutional investors, corporate entities and rich private individuals.
He said the social sector expenditure is basically a budgetary responsibility and should not be met through sale of the PSU shares.
Sen wondered if the government was so hard pressed for resources, how it could allow revenue foregone of Rs 4.50 lakh crore on account tax exemptions and tax arrears amounting to Rs 1.90 lakh crore.

Sen said the PSUs have surplus of Rs 4.85 lakh crore and do not need money through the IPOs for their modernisation and expansion. These units, with a very low debt base, can go in for further debt, if required.
He said the real price discovery of the PSUs worth cannot be decided by the stock market. "Is the stock market such a holy place to decide a company's real worth," he asked.
However, Finance Minister Pranab Mukherjee sought to dismiss his argument stating where else real worth of a firm can be ascertained. "I do not know which is the best place. If I do not test it in the stock market, where else do I test?" Mukherjee said in his reply to the Call Attention Motion.
D Raja (CPI) said disinvestment was "mother of scams" and allows "misappropriation" of state wealth by the private sector.
He alleged irregularities in the sale of PSUs like Balco to Sterling. Prices were rigged , he charged. Raja said disinvestment was unconstitutional and ran contrary to the preamble of the Indian Constitutional. However, Mukherjee dared him to go to the court if it was so. "It is not a correct interpretation of the preamble," he said.
Ravi Shankar Prasad (BJP) asked the Finance Minister how the companies would be selected for the sell-off and whether the workers would be given the shares. Mukherjee said the government always encouraged giving shares to workers but there are not many takers.

Prasad said there should be more clarity on the policy and charged the government with "shifting family silver under the garb of offloading 10 per cent shares".
However, N K Singh (JD-U) and industrialist Rahul Bajaj (Independent) wanted the government to go in for aggressive disinvestment strategy.
Quoting Chairman of the 13th Finance Commission, Singh said if 50 per cent of the PSUs' shares are sold, the government can meet all its requirements of building infrastructure and other capital needs.
Asking the Finance Minister to be "bold" on the issue, Bajaj said the government should not be running PSUs like the airlines which are making loss of Rs 5,000 crore.
Describing the Left members as the "old types", he asked the government not to yield to their pressure.
P J Kurien (Congress) said he supports the government on disinvestment but "not to the extent that the government loses management" of the PSUs. He also sought to know what workers of these PSUs will get and what would be the time-frame for off-loading shares from the listed companies.
Tiruchi Shiva (DMK) sought to know the government's plans in this regard.