New Delhi, Dec 17: Disinvestment, as we have come to
know it, was finally laid to rest this year with the last nail
in the coffin coming from the UPA government`s key ally,
Dravida Munnetra Kazhagam.
Though it appeared at the start of 2006 that the UPA had
managed to breathe fresh life into the disinvestment process
through a compromise with the left on leaving the top nine
PSUs alone, subsequent political opposition brought the whole
programme to a grinding halt.
The year gone by also saw the government swallowing
bitter pills to rid itself of the headache over stake sale in
Balco, whose new owner Sterlite decided to exercise its call
option on the 49 per cent of shares held by the Centre.
As the process of valuation of the government stake took
more than two years, the dispute of valuation arose between
government and Sterlite. The Anil Agarwal-promoted company
decided to pull a fast one on the government by sending the
cheque for the stake to the Finance Minister without being
asked to do so.
The government, which was well aware that questions over
valuation could kick up a political storm, decided to call off
the sale on the advise of the Attorney General.
It returned the cheque that Sterlite had sent and
referred the issue to empowered group of secretaries in a
trouble-shooting measure.
But the only bonanza that the government managed through
the compromise with the Left parties was the sale of eight per
cent residual shares it held in Maruti Udyog limited for Rs
1,500 crore.
Before the financial year was out, the Cabinet had
approved sale of 15 per cent shares by the government in
National Mineral Development Corporation and five per cent in
Power Finance Corporation riding piggy-back on its Initial
Public Offer (IPO).
With two approvals in pocket by march, the government set
a target of Rs 3,480 crore that will flow into the national
investment fund for 2006-07. This was a conservative estimate.
By middle of the year, the government also decided to put
National Aluminium Company (Nalco) and Neyveli Lignite
Corporation (NLC) on the list of companies that it wanted to
sell small equity in.
The first time the NLC disinvestment came up before
Cabinet Committee on Economic Affairs (CCEA), it could not get
the approval and the department of disinvestment was told to
bring a fresh proposal.
The Tamil Nadu elections also made the government go slow
on NLC. When the fresh proposal came up at the CCEA there was
a loud opposition from some ministers, including those
belonging to Congress.
In case of Nalco too, the administrative ministry opposed
the move, saying that the funds raised from sale of company`s
shares should be ploughed back into it. The cabinet note
mentioned the mines ministry`s opposition.
Two days before the CCEA was to take up matter, mines
minister Sis Ram Ola went public against the proposal for
Nalco disinvestment.
The CCEA, however, cleared the two disinvestment
proposals at its meeting held on June 22, 2006.
Post-divestment, government equity in Nalco would have
come down to 77.15 per cent from 87.15 per cent at present. In
NLC, government stake would have declined to 83.56 per cent
from 93.56 per cent at present.
Bureau Report
