People's Democracy

Demand to Give up

ONGC Disinvestment Move

IN a letter written to the union finance minister Pranab Mukherjee on January 21, CITU general secretary Tapan Sen, MP, has expressed concern over the proposed disinvestment of 5 per cent equity capital of the Oil & Natural Gas Corporation (ONGC). The letter says Sen came to know about it from the minister of petroleum and natural gas vide his DO No G-38011/25/10-FIN.I (PT), dated 28.12.2010. the minister’s letter clarified that the proposal for disinvestment of 5 per cent of equity capital in the ONGC from out of “the government’s shareholding has been initiated by the Department of Disinvestment, Ministry of Finance. In the meantime, the proposal has been approved by the Cabinet Committee on Economic Affairs (CCEA).”

In his letter, Sen pointed out that this information came in response to his specific query as to why the ONGC, which is a debt free company with reserve and surplus of Rs 85,413 crore as on March 31, 2010, should approach the capital market for resources when there is enough scope to tap the debt market for this purpose. It was earlier informed to Sen that the proceeds of disinvestment in the ONGC would accrue to the government and not to the company.

Thus, Sen says, it is abundantly clear that the ONGC is being forced by the Department of Disinvestment, Ministry of Finance to go in for disinvestment in order to augment the government’s resources for meeting its revenue expenditure. In this connection, the CITU leader has quoted a part of the speech the finance minister gave while initiating a short duration discussion in Rajya Sabha on December 4, 2002, on the disinvestment of public sector undertakings. He had then said that when he had initiated a discussion on this issue, he “had suggested four things to the government.” He had asked “whether they would formulate a policy that if a public sector undertaking had a track record of continuously making profit, in a non-monopoly atmosphere, in a competitive environment, they will not allow it to be disinvested.” If they feel that they require money for modernisation, for expansion and for technological upgradation, why should they come in the picture? “If you have money, give it through the budget. If you don’t have money, you can tell them that they can dispose of a part of their assets to raise resources from the market so that that could be deployed for expansion, for modernisation and for technological upgradation. Why do you take that money to bridge your revenue gap, when it is your incompetence or inefficiency which leaves a huge revenue gap, between the budgeted target and the revised target?”

In the light of the above relevant and rational argument put forth very strongly by the present union finance minister in parliament as an opposition leader eight years ago, Sen has urged him to review and rescind his decision to disinvest 5 per cent of the government equity in the ONGC. Otherwise, a message, detrimental to democratic polity of the country, will be sent that political parties often change their stand, depending on whether they are sitting in opposition or in the ruling benches in parliament.