Govt wades through political opposition

Moumita Bakshi and Rakesh Pathak

Bumping across political obstacles and internal conflicts, the government could look back with satisfaction on the divestment front thanks to the astute handling by Prime Minister A B Vajpayee of the controversial privatisaion policy that generated maximum heat during 2002.

Vajpayee had to face not only a determined Opposition he also had to overcome the growing dissent within his own Cabinet, NDA (National Democratic Alliance) allies and Sangh Parivar over privatisation of profit making public sector undertakings, especially oil companies Hindustan Petroleum Corporation and Bharat Petroleum Corporation and controversy over resale of privatised Centuar hotel.

Even after the successful privatisation of VSNL, IBP, IPCL, Maruti, Hindustan Zinc and many other PSUs the issues like security and strategic considerations kept popping up.

Apart from Congress and Left parties, the key players in the controversies included Defence Minister George Fernandes, Petroleum Minister Ram Naik, Mines Minister Uma Bharti, HRD Minister Murli Manohar Joshi and RSS chief K S Sudarshan and Shiv Sena Supremo Bal Thackrey.

Citing these and questioning the rationale of privatizing profit-making PSUs, powerful partners in NDA like Samata Party and Shiv Sena as well as a strong section of ruling BJP forced a review of the policy for a "course correction" if needed.

But Divestment Minister Arun Shourie, arguably the most articulate advocate of privatisation, came out as a contented man as most of the issues were settled earlier this month and he could announce the policy statement on divestment in Parliament on December 9.

Walking a tight rope, Vajpayee managed to bring a semblance of unanimity on divestment policy at an informal meeting of key players of his Cabinet on December 5 to break the imbroglio over privatisation of oil PSUs, which had virtually stalled the divestment process for three months raising doubts about its future.

The issue was finally resolved with a compromise formula comprising privatisation of HPCL through strategic sale of equity and a public offer in the case of BPCL. At the same time the government also decided to go slow on privatisation of Nalco in the face of opposition from Uma Bharti and the Orissa CM Naveen Patnaik, of the NDA ally Biju Janata Dal.

Successful completion of some big-ticket divestments right from the beginning of 2002 notwithstanding, the process came to a halt with growing opposition to an 'in-principle' decision taken by Cabinet Committee on Divestment to privatise HPCL and BPCL.

Sharp differences within ministries of petroleum and divestment continued to stall these two companies' sell-off and with Fernandes and others joining the issues, CCD decided on September 7 to defer for three months any decision on the sale of equity in oil PSUs.

Yet another flip-flop of the government's divestment drive was whether or not to allow PSUs to bid for the companies put on the block, with Shourie strongly opposing such a practice, saying this defeated the purpose of privatisation.

But there were not many, who shared Shourie's views and towards the end of December CCD announced that cooperative giants IFFCO and KRIBHCO would be allowed to bid for fertiliser companies and the government would seek fresh bids from NFL, MFL and FACT.

However, the fate of oil PSUs like Oil and Natural Gas Corporation, desirous of bidding for HPCL and BPCL is still uncertain as the CCD on December 27 decided to take up all items relating to the sell-of of the two oil PSUs only after getting Attorney General's Soli Sorabjee's opinion on the legality of sale of the Centre's equity in PSUs, which were created by Acts of Parliament.

To push his way, Shourie had to confront many a strong political personality, which led to virtually a public spat with Bal Thackrey, Ram Naik, Uma Bharti, Telecom and IT Minister Pramod Mahajan, Swadeshi Jagran Manch and others.

On many occasions, likes of Deputy Prime Minister L K Advani were forced to intervene to cool the tempers to ensure that the ruling coalition was not tattered in public and its image was not tarnished.

So much so, at one point Vajpayee took a public platform to admonish his Cabinet colleagues and detractors of sell-off policy as he said that review did not mean going back on the accepted policy and it was better that the Cabinet issues were discussed at an appropriate forum.

The assertion from top had become a must in the wake of uncertainty about the future of the divestment policy, particularly during the second half of the year, as government had targeted to mop up Rs 12,000 crore (Rs 120 billion) during the current fiscal and Rs 78,000 crore (Rs 780 billion) during the Tenth Plan period from the sell-off proceeds.

Against this, the government has succeeded in realigning just over Rs 3,000 crore (Rs 30 billion) so far during the first year of the 10th Plan (2002-07), and the delays and bickering were often cited by international rating agencies as one of the negative factors in sovereign rating of India.

2002: The Year That Was