People's Democracy

EDITORIAL

Strategic Loot of Public Assets

RIDING roughshod over all opposition, the union cabinet has decided to go ahead with the disinvestment of oil giants -- HPCL and BPCL.  It is now crystal clear that the muted opposition from within the ranks of the NDA to this privatisation was meant only for public consumption.

This decision of the union cabinet comes at a time when exposures of murky deals and grafts regarding the sale of other public sector units gather momentum.  The re-sale of Centaur Hotel by the original buyer, A L Batra, a close "friend" of the RSS, has clearly shown how crores of rupees of profit were made within weeks.  This government is only but facilitating such sleaze.

Apart from sleaze and corruption involved in the process, there are larger issues stake.  These have been repeatedly raised in these columns. The public sector is an asset built by the Indian people and owned by them.  Successive governments that assume office from time to time act only as the managers of these assets.  Now, managers are not entitled to sell properties without the permission of the owners.  In this case, the owners are the people of India represented by their elected parliamentarians. The Vajpayee government has scrupulously avoided to take these decisions on disinvestment to the Parliament treating them merely as the Executive's prerogative.  This is both unethical and unlawful. 

This is all the more so in the case of BPCL and HPCL.  These two companies were created by specific Acts of Parliament after a thorough discussion in both the Houses.  The ESSO (acquisition of undertakings in India) Act of 1974 created the HPCL and the Burma Shell (acquisition of undertakings in India) Act of 1976 created the BPCL.  Both these acts have identical preambles which  explicitly state that "it is expedient in the public interest" to acquire ownership of these companies, "in order to ensure that the ownership and control of petroleum products distributed and marketed in India" by these companies, "are vested in the state and thereby so distributed as best to subserve the common good". 

These Acts of Parliament continue to remain valid unless they are specifically repealed by the Parliament itself. Until this is done, any form of privatisation of these companies is illegal. 

The Vajpayee government, in its urgency to facilitate the loot of India, has chosen to violate the law.  They have decided to hand over the HPCL to a strategic partner and float the shares of BPCL for public purchase. The minister concerned, in fact, has gone to the extent of asserting in the Parliament that such disinvestment would not, "result in the alienation of national assets" and "does not result in private monopoly".  He must be joking!  On the contrary, he is being most perfidious.

Reports confirm that the government is planning to disinvest the BPCL shares through a global offering.  This, we are informed, will be one of the largest global offering by an Indian company.  The government feels that the Indian capital market does not have the depth to absorb an issue of the size of the BPCL shares that will be offered for sale.  It is estimated that even if the government were to disinvest half of its 66 per cent holding of equity at current market price, the size of the issue would be nearly Rs 2000 crore or $ 400 million. By going in for a global offering, what else is the government doing, but alienating national assets to foreign capital!

Further, by now it has been established that by offering the IPCL to the Reliance Industries as a strategic partner, the government has, in fact, created a huge private monopoly. Now by offering HPCL to a strategic partner and debarring public sector giants like the ONGC from any consideration, this government is only ensuring larger private monopolies in the petroleum sector.

On both counts, Mr Arun Shourie is misleading the country and seeking to cover up the blatant loot of national assets that is taking place. The future generations will refer to him more as the Minister for ‘Disinformation’ than Disinvestment!

Such a blatant loot of the India’s assets cannot be allowed. The issue must be forced to be debated in the Parliament. The Vajpayee government must not be allowed to divest India any further.