People's Democracy

CITU OPPOSES DISINVESTMENT OF SAIL

The Centre of Indian Trade Unions (CITU) has issued the following statement on August 28

THE CITU strongly condemns the reported move by the government of India to raise more than ten thousand crores of rupees from SAIL through IPO route accompanied by disinvestment. This move is nothing but a camouflaged version of creeping privatisation through dilution of government equity leading to surrender of a part of ownership of SAIL to Indian and foreign private monopoly houses.

SAIL has been one of the most efficiently run public sector enterprises and has the resilience to fight back adverse market conditions as it has been seen in the past and has the resources and wherewithal to carryout its programme of expansion and modernisation. Being almost a debt free company with only 27 paise debt for one rupee equity, it has no problem to raise fund from market through borrowing, if at all necessary. The CITU strongly urges upon the government/ SAIL management to approach debt market instead of capital market for resource mobilisation.

The CITU has always demanded that the public sector companies be allowed to utilise the huge statutory but stagnant reserves they are holding for the purpose of expansion and modernisation. SAIL has a cumulative reserve fund of Rs 24,000 crore which can be easily harnessed to meet the necessary expenses.

The proposal to raise money through issue of fresh shares (IPO) along with disinvestment of shares speaks about the UPA-II government�s strong desire of gradual and creeping privatisation of the jewel like public sector enterprises.

The CITU will oppose such issue of IPO along with disinvestment and increased participation of private parties in the running and owning of SAIL. It demands that the government must stop immediately any move towards the disinvestment of SAIL and calls upon the steel workers and all trade unions to unitedly build resistance movement against the same.