Disinvestment again faces roadblock from DMK

NEW DELHI: After successfully stalling disinvestment plans of the previous UPA regime, DMK has again opposed the Center’s disinvestment policy, a few days after President Pratibha Patil talked in favor of listing of state-run firms.

"I welcome that the UPA government had laid a lot of emphasis on welfare schemes and on social sector spending. But we also have to keep away from the temptation of generating revenue by disinvesting our PSUs," DMK MP Kanimozhi said in the Rajya Sabha.

Participating in the discussion on the Motion of Thanks to the President's address to Parliament, Kanimozhi, daughter of DMK supremo and Tamil Nadu Chief Minister M Karunanidhi, said divesting stakes in PSUs "will not help".

This was especially so to a country like India where socialist model was very important, she said, adding "so, we cannot think of disinvestment in the PSUs".

It was the DMK, whose opposition to disinvestment in the Nevyeli Lignite Corp, led to the previous UPA decision to put on hold all its disinvestment decisions and proposals.

While spelling out the government's policies in her address to the joint session, President Patil had said, "Our fellow citizens have every right to own part of the shares of public sector companies, while the government retains majority shareholding and control.

"My Government will develop a roadmap for listing and people-ownership of public sector undertakings while ensuring that government equity does not fall below 51 per cent," Patil had said. Meanwhile, the Planning Commission said there is a lot of scope of fund raising by state-run firms by diluting government stake.

"So there can be really no objection, whatsoever, to disinvesting while retaining government stake up to 51 per cent... I think there is a lot of scope for raising resources (through disinvestment)," Planning Commission Deputy Chairman Ahluwalia said there may be some cases where companies itself prefer to raise funds from the market for expansion plans.

"So obviously you will take that into account so that (Government plans to divest and companies own plans to dilute government equity) two together do not dilute government stake below 51 per cent," he said.

The President had also said the government will prepare a roadmap for listing and "public-ownership" of public sector units, while ensuring that Government retains 51 per cent stake.

At present, pending disinvestment proposals relate to proposed intial public offers of NHPC and Oil India.