BUDGET 2000
SPECIALS
INTERVIEWS
COMMENTARY
GOVT&ECONOMY
Y2K: BIZ FEATURES
INDIA & THE WTO
CREDIT POLICY
BIZ IN THE USA
CARS & MOBIKES
MANAGEMENT
CASE STUDY
BIZ-QUIZ
USEFUL INFO
ARCHIVES
NEWSLINKS
SEARCH REDIFF

Cabinet's divestment panel defers move on Air-India, seven PSUs

The Cabinet Committee on Divestment or CCD today deferred a decision on the proposal of selling majority equity of Air-India to a strategic partner.

The CCD did not take a decision on the divestment of Air-India , a senior Cabinet minister said after the meeting.

As per the civil aviation ministry proposal, the government has proposed to sell 51 per cent equity stake in the loss-making national carrier to a strategic partner. The proposal was on the lines of the Disinvestment Commission recommendations.

It is not known why the CCD could not meet on Thursday as per the original schedule.

The CCD also failed to take decisions on a number of proposals that came up for discussion as details of modalities were not finalised.

The committee decided that the ministers concerned will have to hold discussions before a final decision is taken.

Parliamentary Affairs Minister Pramod Mahajan said there was complete unanimity on the divestment proposals of all public sector undertakings including Air-India and Pawan Hans Limited.

The committee decided that all the seven proposals, which came up for discussion today, will be taken up again for a final decision after the budget session, which will end on May 17.

According to highly-placed sources, the government did not take any decision on the sale of seven public sector companies as there were differences on details like the quantum of shares to be offered to strategic partners.

Govt okays ONGC plan for oil exploration

The committee approved a proposal of Oil and Natural Gas Corporation in principle to carry out exploration in deepwater areas granted to it on nomination in alliance with exploration and production companies of repute, having deep water exploration and production experience.

Mahajan said this would be a one-time exception limited to six blocks.

Three of these blocks are in the Krishna-Godavari basin, two in the Kerala-Konkan basin and one in the Kutch basin in Gujarat.

Permission to ONGC to select alliance partners by inviting offers from shortlisted companies will be approved by an empowered committee of secretaries constituted to consider proposals under the New Exploration Licensing Policy or NELP.

The minister said the decision is expected to accelerate exploration efforts in the deepwater areas and reserve accretion in the country.

UNI

Amberish K Diwanji adds from New Delhi:

The government has decided to pull out of Air-India and Indian Oil Corporation but the finer details are to be worked out. Mahajan said that the divestment department (headed by Arun Jaitley) will hold meetings with the ministry of civil aviation and the ministry of petroleum and natural gas.

Mahajan dismissed reports of disagreements within members of the National Democratic Alliance on the divestment policies being pursued.

"There is a complete consensus that the PSUs have to divested otherwise they will simply cease to function. If we don't divest, it will harm India's economy more. But what remains to be decided are certain details of how to go about it, that is all," he declared.

The minister further said that the opposition was simply politicising the issue of divestment. "The opposition parties opposed the sale of Modern Foods to Hindustan Lever. But today, Modern Foods is doing fine, and had it stayed with the government, we would have been forced to shut it down," he said.

Mahajan stated that the government's only condition on divestment was that no worker could be retrenched. "Till date, no worker has been retrenched. For instance, in Modern Foods, a voluntary retirement scheme was offered to 200 workers and it was so good that 500 workers opted for it," he claimed.

Private companies to be allowed in aviation subsectors

The issue of divestment of government stake in Air-India

Business