People's Democracy

CAG REPORT ON DISINVESTMENTS:
CITU Demands A Commission of Inquiry 

The secretariat of the Centre of Indian Trade Unions (CITU) issued the following statement on August 26, 2006

THE report of the CAG on disinvestments of PSUs during 1999–2003, submitted to parliament pointing serious lapses on several counts in the cases of disinvestments leading to huge loses to the national exchequer, has squarely vindicated the stand of the CITU that disinvestment of PSUs is itself a malafide concept and therefore the deals are bound to involve corruption.

It has been pointed out in the report that the NDA government failed to ensure effective competition in the bidding, mainly due to deliberate delay in taking crucial decisions by the authorities and doubtful role of the global advisors appointed by the then Department of Disinvestment (DoD) of the government. The Report has pointed that there has been gross undervaluation of the PSUs, and further all and sundry approach was mysteriously adopted by the then government by totally ignoring the importance of core sector, high value PSUs. Cartelisation has been indulged in by the government thereby defrauding the country in terms of hundreds of crores of rupees. The cases covered in the report are Modern Food, BALCO, Hindustan Teleprinters, CMC Ltd, Hindustan Zinc, VSNL, IBP, IPCL and Paradeep Phosphates. The repeatedly advanced argument by the CITU has figured in the report of CAG in their observation that valuation of PSUs “did not reflect properly the replacement cost or the liquidation value of the assets.”

The CITU reiterates its demand to put a complete stop to any further move of disinvestment of PSUs under any nomenclature. Further, a Commission of Inquiry must be appointed to investigate all the past cases of disinvestments and the terms of reference should be finalised in consultation with the trade unions to ensure fixation of responsibility for the financial losses and damages caused to the nation.